The COVID-19 pandemic tempered private sector appetite for big-ticket infrastructure in the Philippines last year, even as transport and “new normal” like health-care projects remained lucrative investment ventures, the Asian Infrastructure Investment Bank (AIIB) said.
In the Asian Infrastructure Finance 2021 report released on the sidelines of its recently concluded annual meeting, the Beijing-based AIIB noted that alongside last year’s record gross domestic product (GDP) contraction of 9.6 percent, the value of private sector-led infrastructure transactions fell to 33 percent to $2.4 billion.
“The lower transaction value in 2020 was driven by subdued investments in transport in 2020, at $1.1 billion (compared with $3.4 billion in 2019), indicating that the stringent lockdown, one of the longest in Asia, has significantly affected the sector,” the AIIB said.
“Despite rising demand, social infrastructure saw no closed deals in 2020 (compared with $580 million in 2019), which reflects the level of difficulty to finance the sector,” it added.
The AIIB nonetheless noted that the telecommunications, power and water sectors—deemed important during the pandemic-induced lockdowns that kept people at home—were able to build additional facilities last year compared to activity in 2019, prepandemic.
Infrastructure projects were put to a halt at the height of the lockdown last year due to social distancing restrictions, but the government eventually allowed construction activities to resume under minimum health standards to prevent the spread of COVID-19 among workers.