ARSENIO M. BALISACAN
Economic Planning Secretary and NEDA Director-General
Forum on Financing Options for Public-Private Partnerships (PPPs)
The Peninsula Manila, Makati City
24 April 2015
Development partners and investors from local and foreign financial institutions, colleagues from government, sponsors of this event, guests, friends, ladies and gentlemen—a pleasant good morning. It is a pleasure to welcome you to this Forum which aims to bring together local and foreign financing experts in discussing the various financing options for public-private partnership (PPP) projects.
In recent years, the Philippines has seen stellar economic growth and critical structural reforms transforming the country’s image in the international development community from the “sick man of Asia” to one of the most economic dynamic fast growing countries. One of the Government’s strategies to sustain this robust economic performance and the improved confidence among the international business community is to accelerate infrastructure development as stipulated in the Philippine Development Plan (PDP).
Under this plan, the overall strategy of the Government for infrastructure development is to increase public infrastructure spending from 2.7 percent of the GDP in 2013 to at least 5.0 percent or about PhP826 billion by 2016 in order to support the growth requirements in the coming years.
In line with this, various master plans have been formulated to guide the development and implementation of infrastructure projects and other development interventions. These plans are translated into priority programs and projects that are currently being implemented and/or will be started within the medium-term by national government agencies (NGAs), government-owned and controlled corporations (GOCCs), government financial institutions (GFIs), and other government offices and instrumentalities.
Based on the Comprehensive and Integrated Infrastructure Program (CIIP) 2013-2016 and beyond, the priority programs and projects for the infrastructure sector comprises a total of 3,077 projects with total investment requirements amounting to about PhP6.58 trillion. Of this investment requirement: a total of nearly PhP 3 trillion (45.4%) is allocated for the development of the country’s transport system covering air, land, and water; PhP1.37 trillion (20.8%) is for social infrastructure to ensure the protection of public health and the environment, improvement of access to quality health and education facilities, and access to decent housing and services; over PhP1 trillion (15.4%) is for the equitable and efficient management of water resources to ensure adequate, safe and sustainable water for all; PhP847 billion (12.9%) is for sustainable, diverse and reliable energy sources; and PhP89 billion (1.3%) is for the provision of fast, reliable and affordable Information and Communications Technology (ICT).
Indeed, the current administration has achieved major achievements in infrastructure development. In addition to the government’s priority programs and projects, several non-structural reforms, those mentioned already by Cosette, including the revision of the Build-Operate-Transfer (BOT) Law Implementing Rules and Regulations (IRR) and the Joint Venture (JV) Guidelines, have been pursued to streamline government processes, to make the business environment conducive to investments, and to address constraints and bottlenecks in infrastructure provision.
Aside from this, and perhaps more importantly, the Government has undertaken new policy measures to boost public infrastructure spending by tapping private sector participation in public infrastructure development. Through private sector investments under the country’s pioneering PPP Program, public resources can be freed up and be utilized for the provision of much needed social services. In line with mobilizing the private sector, the government will continuously improve public sector governance and institute policy reforms to improve the business climate in the country.
We are privileged in this Forum to have with us investors, banks, and other financing institutions that will provide and equip the country’s PPP Program with various options for financing PPPs. For instance, we hope to learn from BPI Capital Corporation how the Government could create a suitable environment for issuance of project bonds for PPPs; from Macquarie Capital the packaging and financing for PPP projects; from Sumitomo Mitsui Banking Corporation (Singapore) the importance of sovereign guarantees for PPPs; and from Sun Life Investment Management how to attract institutional investors.
To my mind, there is no better way to ensure the future success of the country’s PPP Program than by bolstering greater collaboration between the government, the private sector, and other stakeholders. Hence, I invite everyone to actively engage in the presentations and discussions. Let us use this unique opportunity to share our knowledge and see how we can help one another in moving forward to realize our shared vision and goals for the Philippines.
Thank you and have a fruitful day.