Philippines’ PPP pipeline reaches P3.16T, led by transport projects

THE PHILIPPINES’ pipeline of public-private partnership (PPP) projects has reached 252 with a combined value of P3.16 trillion, the government said.

Data from the Public-Private Partnership Center showed that 168 projects worth P3.02 trillion will be implemented by the National Government, while 84 projects worth P136.26 billion will be carried out by local government units.

Most of the projects, or 194, are solicited or government-initiated, while the remaining 57 projects are unsolicited.

In terms of project value, the railway sector accounted for the largest share at P1.97 trillion, followed by land transport at P274.06 billion and property development at P221.46 billion.

By number, the transport sector accounted for the most projects at 94, followed by property development (46) and information and communications technology sector (23).

Nigel Paul C. Villarete, a senior adviser on public-private partnerships at Libra Konsult, Inc., said the concentration on transport projects reflects its role in enabling other projects.

“Most projects cannot offer their full financial and economic contribution to development without the means of transportation of people, products, and capital from the producer to the user,” he said in a Viber message.

“That is why many people are interested in it (transport sector) because the sector is the enabler of economic development,” he added.

According to the PPP Center, most of the projects will be located in the National Capital Region (38), Central Luzon (32), and Mindoro, Marinduque, Romblon, and Palawan (Mimaropa) Region (29).

However, a large majority, or 224 PPP projects worth P2.65 trillion, are still under the project preparation stage.

Meanwhile, 17 projects worth P141.86 billion are under the approval stage, while 11 projects worth P371 billion are in the procurement stage. 

With most projects still being prepared, Mr. Villarete said budget constraints are a key factor preventing them from proceeding.

“There are a lot of feasible projects which can be undertaken anytime but we are always constrained by the limitations imposed by our ability to spend,” he said.

“That is why it is very important to have a firm and rigid project evaluation system which is based on the economic internal rate of return,” he added.

Mr. Villarete also said external risks, such the conflict in the Middle East, are not expected to have a significant impact on PPP projects.

“Maybe there might be slight hesitation (from investors) but I do not think there is a cause for it,” he said. “But overall, I do not see any sizable slowing down of PPPs due to (the Middle East) war,” he added.

In an interview in late March, PPP Center Executive Director Rizza Blanco-Latorre told BusinessWorld that the center does not expect the conflict to affect the PPP pipeline in the near term, although a prolonged war could have an impact.

The Philippines, a net oil importer of crude oil, is extremely vulnerable to global crude price swings. It is under a one-year state of national energy emergency amid soaring fuel prices and declining reserves. — Justine Irish D. Tabile