Government setting up fund to manage PPP risks

MANILA, Philippines — The government is set to establish a risk management fund for public-private partnership (PPP) projects.

During the recent Economic Journalists Association of the Philippines - San Miguel Corp. Business Journalism Seminar, PPP Center deputy executive director Jeffrey Manalo said a risk management fund would be established in line with the PPP Code approved in December.

Under the PPP Code, the risk management fund will help ensure fiscal sustainability and enable the negotiation of better financing terms for PPP projects.

The PPP risk management fund will also be used for the payment of contingent liabilities arising from PPPs in accordance with contract terms.

Manalo said the PPP Center met with the Bureau of the Treasury (BTr) recently to discuss the creation of the fund.

He said the plan is to convene the Technical Working Group on Contingent Liabilities composed of agencies including the Department of Budget and Management, BTr and the Department of Finance.

“Hopefully, with that first meeting, we’ll be able to draw a more complete timeline on how this fund will be set up,” Manalo said.

As to how much would be needed for the risk management fund, he said the proposed amount will be based on guidelines to be issued by the Development Budget Coordination Committee (DBCC).

In terms of funding sources, the PPP Code identifies general appropriations, income from existing PPP projects and other sources determined by the DBCC.

The PPP Center is tasked to manage the fund.

Given the tight fiscal space, the government is pushing for PPPs as a mode for implementing infrastructure projects.

At present, there are 125 PPP projects worth P3.03 trillion in the pipeline.