Private firms on PPP: Nice but slow

Cherrie Regalado
The business sector commends the current administration's plan to increase infrastructure spending, but says projects should move faster

INFRA TALK. Government officials and private sector representatives discuss infrastructure issues at the July 17 economic briefing. Photo courtesy of Rappler

Manila, Philippines – Commendable, but slow.

This is the private sector’s take on the Aquino administration’s plans for the country’s infrastructure development.

Economic managers speaking before an audience of almost 1,200 at the Philippine Economic Forum highlighted the administration’s thrust to increase infrastructure spending in the next few years.

READ: Live blog of the Economic Forum

Private companies have been identified as key players to efforts of the government to design, finance and operate capital intensive and job-generating infrastructure projects that the state don’t have the expertise and resources to be in-charge of.     

Increased spending for infrastructure

Department of Public Works and Highways  Secretary Rogelio Singson said at the forum the government will increase its spending on infrastructure to 5% of the gross domestic product.

Singson noted that his department’s budget for capital outlay projects will reach P184 billion in 2014.

Improvement of bridges, creation of farm-to-market roads, structures to mitigate flooding and projects to support tourism will be prioritized, the DPWH secretary said.

DPWH has earmarked some P56 billion for the improvement of structures that support tourism, a sector that is expected  to generate more employment.

“We are looking at P56 billion investment to support tourism, equivalent to 2,000 km of roads leading to tourism destinations,” Singson added.

Tourism Secretary Ramon Jimenez said these network of roads are needed to make it more convenient for tourists to reach the country’s sea, sand, and other destinations.

READ: Jimenez: Tourist arrivals steady despite Zambo crisis

“Tourism is about balance, about demand and supply. It’s what’s driving [demand for] infrastructure, like airports. Philippines is not part of a contiunous landmark, unlike other SEA countries. This explains why 98% arrive by air, and not arrive by land,” he explained.

Nice, but faster please

Plans to build more roads, ports and fix existing structures are one area that make the Aquino administration  different, according to Michael Rodriguez, Managing Director at Macquarie Infrastructure and Real Assets.

“This has been the first government in a long time to focus on infrastructure,” he noted, referring to Aquino government’s big splash in 2010 touting the public-private partnership (PPP) scheme.

But an acceptable phase of improving the infrastructure in the country should also  be considered by  the government to entice investors.

“If there are no investments and improvements in infrastructure, then money will go to short-term investments, or worse, to other countries,” Rodriguez warned.

Long-term investors

Nestlé Philippines President and CEO John Millers stressed that infrastructure projects, such as ports, roads and power plants are needed to attract long-term investors to the country.

“The innovation of RORO (roll-on, roll-off) will be of great importance. Ports are important for manufacturers. We welcome the (power) plants that will be put up, especially in Mindanao. We look forward to being able to connect directly to the grid,” Millers said.

National Competitiveness Council Co- Chairman Guillermo Luz told Rappler the private sector is growing impatient with the slow pace of infrastructure projects.

He noted that investors have noticed that the Philippines has been a laggard in developing structures compared to its neighbors.

The private sector is concerned about the pacing. There were high expeectations. The private sector felt that it can move faster,” he added. – Rappler.com