Bigger private-sector role eyed in ‘new’ PPP

By Riza Lozada

The country’s economic managers are considering a revamp of the Private-Public Partnership (PPP) program to jumpstart an infrastructure buildup that the Duterte administration believes to be the key to sustaining economic growth.

The Department of Finance (DOF) plans to tap “unsolicited proposals” from the private sector to hasten the setting up of “capital-intensive infrastructures” that are expected create jobs and invigorate the economy.

Government projects on improving public transport and logistics are among the PPP ventures that are open for unsolicited proposals, according to Finance Undersecretary for Privatization and Office of Special Concerns Karen Singson.

“We are now looking at unsolicited proposals and opening options for the government to enter projects with the private sector,” said Singson at the recent Philippines Energy and Infrastructure Finance Forum at the Fairmont Hotel in Makati City.

At the same forum, Socioeconomic Planning Secretary Ernesto Pernia said the Duterte administration is redoubling efforts to meet the country’s infrastructure needs to sustain solid domestic expansion.

Pernia, who is also the National Economic and Development Authority (Neda) director-general, said infrastructure plays a pivotal role in boosting the country’s economic competitiveness, encourages business investments, reduces poverty and inequality by providing job opportunities, and increases communities’ resiliency to natural disasters.

In the past six years, 115 projects worth P1.64 trillion have been approved by the Neda Board, which is chaired by the sitting president, Pernia said.

Of the total, 94 are infrastructure projects, 57 are related to transportation, 25 are water resource-related, seven are social infrastructures, three are related to information and communications technology (ITC), and two are power and energy-related.

Forty-three of the projects were funded through Official Development Assistance (ODA) loans, while 26 were locally financed and 25 were funded through PPP.

Pernia said the government is “determined to build on the gains of past administrations and ensure that public interest, especially that of the poor and disadvantaged, is at the heart of the government’s plan and projects.”

Singson said allowing PPP ventures through unsolicited proposals would be a better option because it would allow the government to take advantage of the efficiency and technological innovations of the private sector, while freeing the government from commitments in providing subsidies or sovereign guarantees to projects.

“Transport projects or logistics projects would basically have no cost for the government, no subsidy and no guarantees,” Singson said at the forum organized by the media organizations IJ Global and Euromoney. “The private sector is sometimes more efficient in coming up with ideas, we’re really willing to work with them.”

One form of unsolicited proposal is the Swiss challenge, where a private-sector proponent offers a plan to build or execute a government project.

The private-sector proposal would then be open to a “challenge” or competitive bidding in the form of counterproposals from other interested private parties.

The original proponent bags the project if it opts to top or surpass the best offer from among the rival bidders.

Pernia said that in order to sustain economic growth, greater focus will be applied to addressing the infrastructure gap that is provided under the Philippine Development Plan (PDP) 2017-2022.

Under this, infrastructure spending will be increased from the current 5 percent to 7 percent of gross domestic product (GDP).

“The public-private partnership mode of investment will continue to play a key role,” he said.

Pernia said 10 infrastructure projects are awaiting the Neda Board’s approval during its scheduled meeting this month.

Some of these projects are the South Line of the North-South Railway project, Phase II of the Maritime Safety Capability Improvement project for the Philippine Coast Guard, the Edsa-Metro Manila Bus Rapid Transit project and the Plaridel Bypass Toll Road project.

Aside from increasing public-infrastructure spending, Pernia said the government plans to increase expenditure efficiency by linking the government’s planning, programming, and budgeting processes.

“The purpose is to ensure that public resources are better channeled to projects that benefit productive sectors and create more jobs,” he said.

Pernia said ensuring that investor confidence remains intact is another goal to “generate additional financing” for infrastructure projects.

“To promote competition and investments, the government will continue to improve governance in the infrastructure sector and institute policy reforms through improving PPP processes and procedures,” he said.

Pernia said the government considers the private sector a partner in its bid to meet the country’s infrastructure requirements.

“I would urge all of you to work with us as partners in achieving faster economic growth coupled with job creation to sharply reduce poverty and inequality,” he added.

“To help encourage private-sector participation in government projects, the DOF is now vigorously implementing an anti-red tape program spearheaded by Finance Undersecretary Gil Beltran,” Singson added.

Finance Secretary Carlos Dominguez III created the Anti-Red Tape Team in July headed by Beltran, following a directive from the President to drastically cut red tape by removing redundant requirements and cutting the processing time needed to obtain permits, clearances and other public documents.

The DOF and the newly created Department of Information and Communications Technology (DICT) have started identifying the data to be gathered from various government agencies for the automated business and citizen registries that they plan to make operational before the end of the year, in compliance with the President’s directive.

Beltran has said the government agencies where the data would be collected include the Bureau of Internal Revenue (BIR), the Philippine Statistics Authority (PSA), Social Security System (SSS), Government Service Insurance System (GSIS), Philippine Health Corp. (PhilHealth), Home Development Mutual Fund (Pag-IBIG Fund) and the Office of the City Treasurer of every local government unit (LGU).

He said pertinent data usually required from applicants who want to secure licenses, permits and other official documents would be culled from these agencies so that they could be linked and shared in the registries.

The registries will serve as a “one-stop shop” for people and corporate entities to easily track and validate their records, removing from them the burden of proving legitimacy, Beltran said.

The data-sharing in the registries would help streamline frontline government services by doing away with the repetitious process of applicants having to fill out numerous forms and submitting to different agencies the same official papers, which, in the first place, are already in the government database, Beltran said.

Beltran said Filipinos could expect the registries to be partly operational before the end of the year. He said a nationwide information campaign would be conducted beforehand to educate the government agencies involved and the users on how to use the automated system.