PPP projects expected to drive investments in construction

SOURCE: BusinessWorld Online Editon
Posted on March 16, 2011

PRIORITY INFRASTRUCTURE projects under public-private partnership (PPP) deals will drive investments in the country’s construction industry, government and industry officials said yesterday.  Investments in the construction sector may reach a trillion pesos this year, as the Philippines proceeds to “develop its landscape” like Hong Kong, Singapore and Taipei, Cristino L. Panlilio, Bureau of Investments managing director, said in his speech during the opening of the Philippine World Building and Construction Exposition at the World Trade Center in Pasay City.

This amount, if achieved, will be equivalent to 10% of gross domestic product (GDP), Mr. Panlilio added.

Last year, investments in the construction industry totaled some P750 billion, or about 7% of GDP, Mr. Panlilio added in a phone interview.

Crucial to this outlook, Mr. Panlilio said, are the “public-private partnership efforts of the Aquino administration and all the ongoing building construction in the country.”

The government announced two weeks ago five PPP projects targeted to be auctioned off this year, namely: the five-year maintenance contracts for Metro Rail Transit Line 3 and Light Rail Transit Line 1, Daang Hari-South Luzon Expressway link, Ninoy Aquino International Airport expressway, and the North Luzon-South Luzon expressway link.

Representatives of construction material firms shared Mr. Panlilio’s optimism.

Conglomerate Siam Cement Group (SCG) projects sales of building materials in the Philippines this year to reach $77.5 million, a 15% growth from last year, the president of SCG subsidiary Mariwasa-Siam Ceramics, Inc. said. SCG products include roof tiles, fiber cement board, thermal insulation and sanitary wares.

Mariwasa-Siam Ceremics President Surasak Kraiwitchaicharoen said in an interview that his company’s growth would be backed by the “growing construction sector and increased sales of ceramic tiles,” which account for 85% of its total building materials sales.

For his part, Marble Association of the Philippines President Abraham L. Ng Sinco said this should be a good year because of aggressive marketing in export targets like the United States and South Korea.

“We have also developed more innovative designs such as mosaics,” Mr. Ng Sinco said in a separate interview. — Ana Mae G. Roa