MANILA, Philippines - The National Economic and Development Authority (NEDA) urged the private sector to consider participating in government projects beyond the build-operate-transfer (BOT) mode as the administration increasingly veers away from pursuing big-ticket projects through the public-private partnership (PPP) scheme.
In a presentation made during the general membership meeting of the Management Association of the Philippines (MAP), NEDA Undersecretary Rolando Tungpalan said the government’s shift to the use of official development assistance (ODA) and general appropriations (GAA) for funding large projects in its ambitious infrastructure program is ultimately meant to speed up the delivery of projects while addressing bottlenecks in the PPP program.
The government is increasingly leaning toward, the so-called hybrid mode of implementing projects which entail constructing the hard infrastructure on its own through traditional procurement, and later on auctioning the operations and maintenance (O&M) of projects to the private sector.
“In the Philippine Development Plan 2017-2022, the government continues to recognize the important role of the private sector through the PPP program, where appropriate. In fact, the PDP clearly states that the investment program of the government for infrastructure projects will be based on an optimal mix of government domestic financing, official development assistance and private capital,” said Tungpalan.
“Even broadly, we have always maintained that the private sector is the engine of growth and thus PPP must not be seen in the narrow sense of the BOT law, but the broader public-private sector engagement in development,” he added.
Concerns have been raised in the business community over the Duterte administration’s preference for funding huge projects via ODA and GAA. Among these is the preference that will be given to contractors from the ODA source country in the construction of these projects. These contractors, however, can sub-contract some of the project works to Filipino contractors.
The administration plans to spend P8.44 trillion in the medium term to upgrade the country’s decrepit infrastructure backbone.
Tungpalan said under the 2017-2022 Public Investment Program, the bulk of these projects will be implemented though government appropriations (66 percent), while the remainder will be carried out through PPP (18 percent) and ODA funding (15 percent).
“Noting the delays that have been encountered in the actual mobilization of PPP projects does not mean that infrastructure spending through PPP will not be promoted,” he said.