MANILA, Philippines - The government is considering putting up an independent non-banking financial corporation that will fund the big-ticket infrastructure projects under the government’s public-private partnership (PPP) program.
In a letter to the Securities and Exchange Commission (SEC), the Department of Finance (DOF) said the new firm to be called Philippine Infrastructure Financing Corp. (PIFC), will be a financing company with a quasi-banking license.
To get it started, PIFC must be incorporated as a stock corporation and obtain a certificate or authority to operate as a financing company from the SEC and must also apply with the Bangko Sentral ng Pilipinas for a Certificate of Authority to engage in quasi-banking activities.
PIFC is expected to offer a wide array of services and activities which include receiving funds from shareholders which form as equity, raising funds through borrowings and the issuance of bonds, providing equity financing for PPP infrastructure projects, and forming wholly-owned subsidiaries to engage in various market activities related to PPP infrastructure development.
The establishment of an independent non-banking financial corporation is consistent with President Aquino’s economic agenda to accelerate infrastructure development in the country.
The Aquino administration has committed around P200 billion for the public-private partnership (PPP) initiative with state-owned pension funds Government Service Insurance System and Social Security System and plunking in P50 billion each. The Land Bank of the Philippines and Development Bank of the Philippines will also shell out P50 billion each for the projects.
The NEDA-Investment Coordinating Committee (ICC) is expected to spearhead the bidding out of the contracts in close coordination with the Finance Department.
The priority projects are airports and new roads or major road improvements, as these would make the country more attractive to local and foreign investors.
Among the infrastructure projects to be bidded out to potential investors include linking the Manila-Cavite Coastal Road with the South Luzon Expressway and the extension project of LRT1.
The government was earlier reported to be wooing investors from Doha and Abu Dhabi to fuel investments in the government’s PPP program.