PPP agency looks to China for funding

The Public Private Partnership Center signaled that China could be an important pillar in the development of infrastructure projects in the country.

On the heels of the Duterte administration’s pivot to China, PPP Center executive director Ferdinand Pecson said they were also looking toward the world’s second-biggest economy for possible financial and technological support.

“We are now looking at a number of infrastructure projects that could be supported by China and also through the Asian Infrastructure Investment Bank, which was started by China,” Pecson said during the PPP Center’s yearend press conference on Friday.

He said support could come in the form of financing for feasibility studies and so-called soft loans.

This would help the program’s expanding pipeline of projects. As of Dec. 15, there were 38 PPP projects, most of which were big-ticket transportation-related deals like railways and airports.

The single-biggest project was a Manila Bay Integrated Flood Control and Coastal Defense Expressway now under evaluation. The Department of Public Works and Highways pegged the project cost at more than P400 billion.

Pecson said the government was now looking at PPP projects using what it described as a “hybrid” model.

Unlike in previous PPPs, where projects were mainly financed by the private sector, the government was studying scenarios where it would pay for the construction of the infrastructure while operations and maintenance would be bid out to the private sector.

“Not all PPPs would follow that model,” Pecson clarified. He said this was becoming a viable option since the government now had more “fiscal space” to finance projects.

The current PPP program was established under the Aquino administration. There were a total of 11 projects listed as under procurement, all of which were carryovers from President Aquino’s term.

The biggest among these was the auction of regional airport projects, which is poised to see some delay since the Duterte administration decided to “unbundle” the airport deals. Pecson said a new prequalification round was needed in this situation.

Since the program started in 2010, a total of 13 PPP projects have been awarded (the Philippine Orthopedic Center was awarded but would no longer push through after the winning bidder terminated the deal following long delays on the government’s side.)