Marcos’ PPP program yet to get off the ground

The return of the public-private partnership (PPP) scheme as a major avenue for the Philippine government to rev up infrastructure development is not yet happening as the institutions that are expected to realize the projects remain weak, according to GlobalSource Partners.

The New York City-based think tank said in a commentary penned by Philippines Country Analyst Romeo Bernardo that the Marcos administration’s recently announced pipeline of infrastructure flagship projects (IFPs) appears similar to that of previous administrations.

This was in the sense that, “the usual comment we hear is that the latest infrastructure program looks more like a shopping list that has not taken budget constraints into account,” Bernardo said.

The National Economic and Development Authority (Neda) unveiled last February a list of 194 IFPs that are mostly transportation and public works. These include 47 projects that are intended to be done through PPP, of which 11 are “ongoing/approved for implementation.”

The Neda said that, for the entire list, the bulk of funding needed were to come from official development assistance (ODA) or aid from foreign governments as well as the country’s own national budget.

More time needed

The PPP scheme was much-touted during the administration of former President Benigno Aquino III, but took as long as the fourth year of his term to gather momentum. PPP stalled under the Duterte administration, which favored ODA as a source of funding for infrastructure.

“Overall, we get the sense that the building blocks for getting PPP off the ground are not yet in place,” Bernardo said.

“Talking to experienced on-the-ground players, we gather that despite the current administration’s more welcoming attitude, it will take time to get the PPP program up and running smoothly again,” he added.

The economist observed that long-standing issues continue to hound project selection and implementation.

These include delays in securing right of way, which the think tank said remained the major bottleneck for projects despite the enactment of Republic Act (RA) No. 10752 in 2016.

Also known as the Right of Way Act, RA No. 10752 is intended to facilitate the acquisition of right-of-way sites or locations for infrastructure projects of the national government.

Lack of framework

Bernardo added that there was also the issue of the nonimplementation of user fees, such as tolls and fares.

He cited President Marcos’ order to defer the implementation of approved fare hikes on Metro Manila’s commuter rails, which have not adjusted fares since 2015, as a recent example.

A third issue is the lack of a national inter-modal framework to serve as a basis for identifying, selecting and prioritizing projects that will yield the highest economic returns for a country that is fragmented into islands.

Bernardo said that without a reference master plan, evaluating project proposals would necessarily involve some “ad hockery” and create more confusion.

“The challenges start with the bureaucracy where a strong PPP Center is needed to facilitate projects and avoid papers being pushed from one department to the next, with requirements multiplying at every stage,” he said.

“All this, a reflection of the country’s weak institutions, contribute to long delays in bringing projects to completion,” he added.

According to the Department of Budget and Management, disbursements for infrastructure increased by 36 percent to P113 billion in the January-February period this year from P83 billion last year. INQ