Administration scales back PPP projects to 2 from 10

THE government on Wednesday said it may offer at least two projects to investors under the so-called public-private partnership starting this quarter, scaling down from an earlier plan for 10 proposals this year.

There are four projects worth P34.3 billion in advanced stages of preparation, according to Cosette Canilao, deputy executive director at the Public-Private Partnership Center. They include two toll roads, a plan to build about 10,000 classrooms, and a proposal to manufacture vaccines against influenza, diphtheria and tetanus.

“Planning these projects takes a great deal of time to ensure their success,” Canilao said.

“We want to create a program that can become a legacy that would solve our nation’s infrastructure needs.”

More than a year after announcing its infrastructure plans, the administration of President Benigno Aquino III has yet to seek bids from investors for projects under the public-private plan. The delay may undermine his goal to bolster growth to create jobs and cut poverty as the Philippines competes with the rest of the region for foreign capital to develop roads, ports and utilities.

From 1970 to 2009, the Philippines lured less foreign direct investments than its Southeast Asian neighbors, according to the United Nations Conference on Trade and Development. It attracted $32.3 billion compared with $285.8 billion for Singapore and $104.1 billion for Thailand.

The government might invite bids to extend railway lines and operate airports after the first quarter of 2012, Transport and Communications Secretary Manuel Roxas II said in an interview this week. These projects were earlier planned for 2011.

“It’s becoming more disappointing,” said Euben Paracuelles, a Singapore-based economist at Nomura Holdings Inc.

“Without new investments coming in, the pent-up investments we saw earlier this year will start to weaken. Coupled with the fiscal situation, investors will increasingly see this as a worry as growth may suffer.”

Growth in the $200-billion economy slowed for a fourth straight quarter to 3.4 percent in the three months through June, compared with a 4.6- percent gain in the January-to-March period.

The government plans to narrow the budget deficit to 2.6 percent of the gross domestic product, or about P286 billion, in 2012, from a target of 3 percent, or about P300 billion, this year.

Mr. Aquino has won credit-rating upgrades after increasing revenue and controlling spending. –Karl Lester M. Yap, Bloomberg