19 July 2012, Malaya Business Insight
by Angela Celis
The Philippine economy could grow an additional two percentage points each year if the government could bid out all of its planned Public-Private Partnership (PPP) projects, an official from the Department of Finance said.
Finance Undersecretary Gil Beltran said that government calculations showed that PPPs, which could easily account for 2 percent of GDP, could at the same time add two percentage points to GDP growth.
“That was the plan,” Beltran said “for it to boost growth”.
The government was only able to bid out one PPP project in 2011, as against the 10 promised PPP projects to be rolled out last year.
The P1.956 billion Daang Hari-SLEX Link Road Project was awarded successfully to Ayala Corp late last year.
“Had all projects been bid out last year, that would have been an additional two percentage points,” Beltran said boosting growth from 3.9 percent (actual) to 5.9 percent.
Estimates from the National Economic and Development Authority showed that last year’s growth was also dragged by the decline in exports by 2.2 percentage points; government underspending by 0.8 percentage point; and the damages caused by natural calamities by 0.4 percentage point.
For this year, Beltran estimates that the PPP projects will contribute a little less than two percentage points to GDP growth since the government only plans to bid out eight PPPs for 2012.
“Our GDP growth rate is high because the private sector is spending a lot,” Beltran said, referring to the 6.4 percent expansion recorded in the first quarter of the year.
“But the private sector is waiting for the infrastructure projects, such as the PPP projects that will be bid out,” Beltran said.
The PPP website shows that as of July 4, 2012, the government was only able to bid out two projects in the first half of the year.
These are the P59.2 billion LRT Line 1 Cavite Extension and Operation and Maintenance Project to be implemented by the Department of Transportation and Communications, and the P10.04 billion PPP for School Infrastructure Project to be implemented by the Department of Education.
The PPP Center listed 19 projects that could be bid out in its website, but the government earlier said that it is planning to roll out only eight PPP projects this year.
Next on the bidding block is the P15.77 billion NAIA Expressway Phase 2 Project, with the invitation to pre-qualify and bid advertisement expected to be published this month.
PPP Center Executive Director Cosette Canilao earlier expressed her confidence that the target of eight PPP projects this year will be met.
