Source: Business Mirror
31 January 2012
THE good news is that the centerpiece economic program of the Aquino administration will gather momentum this year after more than one-and-a-half years of near-inertia.
But the second half of 2010 and the entire 2011 passed with only one measly PPP project successfully bid out. The Ayala Group bagged the P2-billion, 4-kilometer Daang Hari-South Luzon Expressway link road project last year.
Now comes the happy news that 2012 will be a “very busy” one for the PPP Program, with plenty of proposals for sanitation, water services, post-harvest and tourism projects.
According to the PPP Center, the P900-million Vaccine Self-Sufficiency Program of the Department of Health is likely to be the first on the auction block, with the P25-billion Metropolitan Waterworks and Sewerage System New Water Supply also slated for rollout this year, the largest project to be launched.
“The PPP Program is exactly the framework where big and small, foreign and local companies all have a level playing field and can participate in a transparent bidding process,” says the PPP Center.
It is good that Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. has given assurances that the government is continuing to screen projects and working on ways to allow as many companies to participate as possible. That foreign firms can participate in components of projects or partner with local companies when it comes to operating such critical infrastructure as utilities, is a positive development.
The private sector appears to be optimistic on PPP prospects, and that’s a good sign.
BDO Capital and Investment Corp., for instance, asserts that “even three to four successful auctions would be already a good signal, as these would help shield the country from external risks and enhance the country’s image as an investor-friendly market.”
For its part, brokerage firm First Grade Holdings Inc. believes there is a “bigger window of opportunity” this year since many companies made money last year and the government generated much savings that can be used for projects.
The National Economic and Development Authority estimates that the Philippine Investment Plan 2011-16, where the PPP Program is a critical component, would create 1.9 million jobs and boost economic activity by 5.5 percent of gross domestic product (GDP) on average every year once it is fully implemented.
That would mean the government’s targets of curbing poverty by creating 1 million new jobs a year and generating growth averaging 7 percent to 8 percent per year could be achieved.
As the cornerstone of the government’s Philippine Development Plan 2011-16, the PPP is crucial for the government to accelerate public spending to spur economic activity and create more jobs.
The ramped-up PPP this year is a welcome development as the government has admitted that low infrastructure spending and the snail-paced PPP Program contributed to the lower-than-expected growth of the Philippine economy in 2011. In the first nine months of 2011, GDP growth averaged only 3.6 percent—way below even the government’s reduced 2011 growth target of 4.5 percent to 5.5 percent.
The Aquino administration is on the right track in accelerating PPP projects this year and for the rest of its term. If the PPP Program delivers, it will no doubt make a significant impact on job creation, thus helping reduce mass poverty and improve
living standards.
