Banks seen providing funds for infra
Credit to Author: Ma. Lisbet K. Esmael| Date: Thu, 14 Nov 2019 16:25:49 +0000
THE Duterte administration is banking on private sector financing as it pushes for more infrastructure projects, a Fitch Group unit said.
In a report issued on Wednesday, Fitch Solutions said public-private partnerships (PPP) would play a major role in the government’s revised list of flagship infrastructure projects, where it boosted the number to 100 developments from the previous 75.
PPP developments under the list also increased from nine to 26, which Fitch Solutions noted signals the government’s “shift back to a PPP-friendly stance that was previously adopted by the administration under President Benigno Aquino 3rd and will offer the potential for more opportunities for private sector participation of the BBB (Build, Build, Build).”
“The increase in the number of PPP projects suggests the government’s eagerness to tap on private capital for infrastructure investment, as its ambitious infrastructure plans face fiscal constraints,” it added.
Although the projects increased to 100, three major bridges were scrapped from the original list owing to economic viability and technical constraints, Socioeconomic Planning Secretary Ernesto Pernia said earlier. These were the 18.2-kilometer (km) Luzon (Sorsogon)–Samar bridge, the 23-km Leyte–Surigao bridge, and 24.5-km Cebu–Bohol bridge.
The revised list demands at least P4.2 trillion, doubled from the investment requirement of P2.40 trillion for the original 75 projects.
While the country offered a “well-developed PPP program,” Fitch Solutions said the private sector would continue to experience “a high degree of risk in the Philippines.”
“Despite having one of the most comprehensive PPP frameworks in the region, slow reforms to tackle the root issues such as bureaucratic inefficiencies will continue to be a source of risk for investors,” it said.
The inefficiencies, Fitch Solutions said, have often resulted in delayed project time lines and cost overruns, noting that this issue is not unique to the Philippines.