THE Public-Private Partnership (PPP) Center of the Philippines said it hopes to approve more solicited projects at the local government unit (LGU) level.
“We’re hoping to be able to develop more solicited PPPs. I think the important ones, especially where LGUs are concerned, are solid waste management, bulk water supply, transportation terminals, and as I mentioned, public markets,” PPP Center Executive Director Ma. Cynthia C. Hernandez told BusinessWorld on Tuesday.
She added that those projects are within the jurisdiction of LGUs and cater to the needs of their constituents.
A solicited proposal refers to projects that are identified by the implementing agency from the list of their priority projects, for which bids are invited from the public. An unsolicited proposal is submitted by the private sector without formal solicitation from the government.
Ms. Hernandez said it takes time to approve the projects while feasibility is evaluated.
If a project is deemed unfeasible, the proposers of the project may have to seek alternative financing, like a hybrid arrangement involving borrowing by the government proponent.
Ms. Hernandez noted that there was more freedom for the private sector and the government to agree on feasibility due to the new mechanisms contained in the PPP code.
She added that recovering the investment is also a key consideration.
Projects that involve user fees that the private sector can use to recover the investment are usually approved faster, she said.
Since the approval of the PPP Code in March, Ms. Hernandez noted that the PPP Center has seen an uptick in unsolicited PPP project proposals.
“For unsolicited projects, a lot of them are focused towards LGUs. It’s welcome in the sense that from the National Government perspective, we don’t really have the bandwidth to develop PPP projects in each municipality. And if you think about how local governments are structured, leaders have three years to procure and develop a PPP project and this is too short,” she said.
She added that conglomerates and businessmen can “participate” more in the infrastructure in their locality through unsolicited proposals.
To accommodate this, the PPP center has been ramping up its capacity building for LGUs, Ms. Hernandez said.
Ms. Hernandez noted solicited PPP projects have been making progress, with the recent signing of the technical assistance agreement for the Clark National Food Hub Project with the Clark International Airport Corp. and the Asian Development Bank (ADB), with ADB as the transaction adviser.
“The development of the project is expected to enhance agricultural productivity in the area,” she said.
Ms. Hernandez said that there were 143 total PPP projects as of last week. This would make up one fourth of the total number of Infrastructure Flagship Projects (IFPs) and around half in terms of value.
Analysts, meanwhile, called for a more diverse lineup of PPP projects, particularly railways, to ensure that those being pursued are strategic to the needs of the country as the President affirmed in his address to Congress.
“Rail transport is an important component of our nation’s mobility and should be given the proper attention and focus, but this should be tempered with economic viability,” Nigel Paul C. Villarete, senior adviser on PPP at the technical advisory group Libra Konsult, Inc., said via Viber.
President Ferdinand R. Marcos, Jr. said during his third State of the Nation Address (SONA) on Monday, that infrastructure development is sustained, strategic, and on schedule at the halfway point of his Presidency.
Mr. Villarete said the government must focus on building more rail projects in Luzon and Mindanao, and less so in the Visayas.
“There are a lot of excellent infrastructure projects that need not be contracted through PPP with the National Government; many of these can be done directly with the local government units,” Mr. Villarete said.
He said to advance the government’s transportation plans, the Philippines must emphasize the role of local government units especially in PPP projects.
Further, Mr. Marcos highlighted the role of the private sector in achieving the completion of the country’s major transportation and infrastructure project.
During his SONA, Mr. Marcos cited the NAIA PPP project, which is expected to be turned over to the winning proponent by September.
The NAIA PPP project is considered the fastest project to move from submission to investment coordination committee approval to concession agreement signing.
In March, the New NAIA Infrastructure Corp. (formerly SMC SAP & Co. Consortium) signed a P170.6-billion contract to operate, maintain, and upgrade the country’s primary gateway for 25 years.
“The government should limit and identify the bigger and top-grossing airports for PPP and concentrate on those few,” Libra Konsult’s Mr. Villarete said.
This would help free up the government resources for the Civil Aviation Authority of the Philippines (CAAP) to develop smaller airports, he added.
“Infrastructure is a favorite topic, because it is visible, and our country is deficient in it,” Rene S. Santiago, former president of the Transportation Science Society of the Philippines, said in via Viber.
Mr. Santiago disputed Mr. Marcos’ claim that the government’s transportation and infrastructure projects are on track, Mr. Santiago said, adding that the government is lagging.
“Case in point: Cebu BRT (Bus Rapid Transit) is years behind schedule,” he said.
The Transportation department said the launch of the full operations of Cebu BRT line has been pushed back to 2027.
The project was initially scheduled for full operations by the second quarter of 2025 with partial operations. Once completed, the Cebu BRT system is expected to serve up to 160,000 passengers a day.
“We are in the midst of a ‘railway renaissance’. The Metro Manila Subway Project has logged significant accomplishments in its tunneling works… other railway projects, such as the MRT-7 and the North- South Commuter Railway, are likewise progressing,” Mr. Marcos said.
Mr. Santiago said the government’s focus on railway projects only concentrates on highly urbanized areas and leaves behind rural areas.
“Yes, the railway is a renaissance mainly because it gets the biggest share of the investment pie,” he said.
Meanwhile, the Philippines is pursuing programs to strengthen its digital infrastructure and combat cyberthreats.
“We are optimistic about the policy direction of the Marcos administration regarding cyberspace,” Ronald B. Gustilo, national campaigner of Digital Pinoys, said in a Viber message.
He said the government’s implementation of the National Fiber Backbone project will help bring connectivity and telecommunications services to far flung areas.
During the SONA, Mr. Marcos said phase one of the National Fiber Backbone has been completed and started operations. The second and third phases will be completed by 2026.
The “fiber backbone” plan is part of the government’s internet infrastructure development and is projected to provide enough bandwidth capacity.
In June, the Philippines launched the first phase of the National Fiber Backbone, covering 1,245 kilometers. It consists of 28 nodes from Laoag, Ilocos Norte to Quezon City.
“With the policy reforms and streamlining of processes, telecommunication and internet service providers have reached many and may reach more geographically isolated and disadvantaged areas where their services are much more needed so that the online economic opportunities be available to the population residing in these areas,” Mr. Gustilo said.
Sam Jacoba, founding president of the National Association of Data Protection Officers, said Mr. Marcos should compel the Department of Information and Communications Technology (DICT) to “rigorously and vigorously” implement the National Cybersecurity Plan 2023-2028.
Mr. Jacoba also urged the government to revisit the implementation of the Republic Act No. 11934 or the SIM Registration Act to help narrow the digital gap, and combat the rising cyberthreats.
During the SONA, Mr. Marcos said the Philippines will also focus on capacity building for cyber professionals.
“Development of experts who will ensure that the systems used by the government will be prepared in the event of a cyberattack as cybercriminals intend to capitalize (on the growing digitalization),” Digital Pinoy’s Mr. Gustilo said. — Aaron Michael C. Sy and Ashley Erika O. Jose
