The Market Monitor Minding the Nation's Business
By Jerry Maglunog
A top official of one of the country’s biggest banks has urged the incoming Duterte administration to scrap its predecessor’s failed public-private partnership (PPP) program and start building much-needed infrastructure on its own, using its own funds.
Metropolitan Bank and Trust Co. (Metrobank) Vice Chairman Francisco Sebastian said the PPP program has a “very complicated” setup, so private bidders shied away from it. Even government agencies tapped to help push it were reluctant to do so for the same reason.
He suggested that the unspent funds of the outgoing administration be used on the much-needed infrastructure projects.
The Bureau of the Treasury earlier announced that the Aquino administration would leave about P230 billion in unspent funds.
These should be enough to build at least three PPP projects, said Sebastian, who advises Metrobank in terms of generating funds and expansion of its investments in major infrastructure contracts.
He is also the chairman of Metrobank’s power-generating arm Global Power, overseeing the operations of the bank’s existing power-generation plants in Cebu and Panay islands; and of PBC Capital Investment Corp. and Prima Ventures Corp.
President Aquino had made the PPP the centerpiece of his economic program, but it somehow failed to generate the expected support from the private sector. As a result, only a few of the ambitious projects had taken off. Each of these projects cost from P30 billion to P40 billion.
“The incoming administration should immediately build the next expressway or link between NLEx [North Luzon Expressway] and SLEx [South Luzon Expressway],” said Sebastian, who is also chairman of GT Capital Holdings, Inc. and First Metro Investments Corp.
“If the government itself builds these projects without relying on the private sector, it would avoid many of the usual problems, starting from the bidding phase to the last operations.”
The Aquino administration approved 42 big-ticket projects under the PPP amounting to P439.15 billion. Only a handful has been implemented so far.
Data from the National Economic and Development Authority (Neda) showed that more than half of the approved PPPs were under the DPWH and the Department of Transportation and Communications (DOTC).