Faster PPP rollout ordered

STATE AGENCIES have been ordered to hasten infrastructure project approvals this year in a bid to take advantage of increased investor appetite, President Benigno S. C. Aquino III yesterday said, and also prepare for fierce economic competition from neighboring countries.

“We want an accelerated program for the PPP (public-private partnership) program itself. I have instructed the economic cluster and also the NEDA (National Economic Development Authority) here today,” Mr. Aquino said in an address at the Euromoney-sponsored Philippines Investments Forum.

“There has to be more speed in terms of giving a thumbs-up or a thumbs-down to all the various projects that are under consideration,” he added. “We are missing the opportunities that are already extant.”

He claimed significant interest in PPP projects this year, particularly for school and road infrastructure, with eight projects expected to be rolled out.

Only one PPP project has been successfully bid out by the government to date: the P1.96-billion Daang Hari-South Luzon Expressway Link road contract, which was won by Ayala Corp. last December.

Socioeconomic Planning Secretary Cayetano W. Paderanga, Jr., in a telephone interview, concurred that eight projects would be offered to investors this year even as he noted that only two of 17 deals proposed by the PPP Center have been approved.

“We’re hoping we could have, maybe in the first half, between three to five projects,” Mr. Paderanga said.

These will likely be the Light Rail Transit Line 1 (LRT-1) extension — approved by the NEDA board chaired by Mr. Aquino last week, a Department of Education-led schoolbuilding project — bids for which were solicited in January, and the Department of Health’s vaccine self-sufficiency project.

“They are going to open the bids on the classrooms later this month,” Mr. Paderanga said.

Bidding for the operations and maintenance (O&M) contracts of the Laguindingan Airport as well as the Puerto Princesa Airport may be approved soon, he said.

Projects carried over from the PPP list year will also likely get the NEDA Board’s stamp of approval, he said, namely: the North Luzon-South Luzon expressway link, Cavite-Laguna expressway (P10.5 billion), and the O&M contract for the Metro Rail Transit Line 3.

Also under consideration are the Mactan-Cebu International Airport Passenger Terminal Building, which has yet to pass the Investment Coordination Committee stage, and the LRT Line 2 East Extension and O&M contract.

“We are working on that,” he said of the LRT-2 deal.

“In the early part of the year, the LRT Line 1 Extension still had far to go, but it was approved at the last meeting. So it can change,” he said.

“[The President] has given us instructions to firm up the pipeline. We’ve given him a preliminary report, and he has asked for tighter monitoring,” Mr. Paderanga said.

PPP investments, a Cabinet official said, will come into play when the Philippines join the planned Association of Southeast Asian Nations (ASEAN) Economic Community in 2015.

“ASEAN 2015 is very important for us, so that is why President Aquino has increased investments in people through infrastructure and tourism. We would like to position the Philippines as a northern and Pacific gateway into the ASEAN versus other countries in the region,” Finance Secretary Cesar V. Purisima said at the forum.

Businessmen agreed that there was growing investor confidence but also noted that more work needed to be done to sustain this interest.

“I think that one of the biggest strengths of our country is the service sector. We can attract and create a positive image in the region by bringing local service brands — and in a sense, the country — abroad, which then become more well-known,” said Ysmael V. Baysa, chief financial officer of fastfood giant Jollibee Foods Corp.

Ayala Corp. President Fernando Zobel de Ayala, meanwhile, noted the need for more investments in education.

“Even if we have growing number of graduates, we do not have suitable number of individuals for the growing BPO (business process outsourcing) industry. It’s all about looking at out our educational system and looking how to match graduates with jobs,” Mr. Zobel de Ayala said.

Sergio Pimenta, International Finance Corp. director for East Asia and the Pacific, said: “There also has to be inclusive growth, which means addressing problems like poverty. I would encourage this momentum, but only if this can be built upon to include this kind of growth.” — Franz Jonathan G. de la Fuente and Johanna Paola D. Poblete, Businessworld