A former high-ranking government official believes it is unlikely that the Philippines PPP Centre will be able to award nine projects by the end of June.
Lito Camacho, the Philippines' former Secretary of Finance and a vice chairman at Credit Suisse, believes there will be a short delay for the awarding of expected PPP projects, due to the Presidential election next month. He spoke to Infrastructure Investor on the sidelines of the Credit Suisse Asian Investment Conference last week.
Taking into consideration the May election and the time needed for a new administration to take office, Camacho expects that “it will take a few months for the programme to regain momentum”.
Delayed bid submissions for some of these projects are also creating challenges for the agency, as it hopes to comply with its intended June deadline. For example, the bid submission for a regional prison project has been moved from March 22 to April 20, while the bid deadline for five regional airports has been postponed to an unspecified date.
PPP Centre executive director Andre C. Palacios told press sources last week that the government hopes to award nine PPP projects before the new President takes office on June 30. Palacios hoped the five regional airports would be awarded by this deadline.
With a total of 53 PPP projects in the pipeline, the government has been relying on the PPP programme to help fund the public infrastructure that is much needed for the country’s economic development. Twelve projects worth a total of PHP217.4 billion have been awarded since the programme's inception.
According to Palacios, the private sector needs to urgently work with the government in developing alternative financing schemes for infrastructure projects, such as project bonds and public listings. However, “compared to local investments, the Foreign Direct Investment (FDI) in the Philippines is still weak despite the strong interest,” Camacho pointed out.
He observed that local conglomerates, corporates and investors have been aggressive in the infrastructure investment space. With domestic liquidity and available financing, fierce competition exist among local groups. Foreign investors often partner with local groups to gain exposure to the market.
“Most of the PPP projects we have are financed primarily by local banks. And as we roll out bigger PPP projects, we need to be able to attract other types of investment,” said Palacios at a PPP forum last week.