PH needs more PPP projects-international experts

    With the start of the countdown for the Duterte administration, it should consider more public-private partnership (PPP) infrastructure projects to accelerate its “Build, Build, Build” program.
    Experts air the sentiment as the country faces increasing fiscal constraints due to the pandemic.
    Earlier this month, Fitch Ratings flagged growing fiscal risks faced by the Philippines, as it revised the outlook for the sovereign rating to “negative.”

    MANILA — Experts from international organizations, ASEAN+3 Macroeconomic Research Office (AMRO), Asian Development Bank (ADB), and the International Monetary Fund (IMF) say well-designed PPPs can help perk up the economy which has been battered by the pandemic.

    “The Philippines has made considerable progress in infrastructure investment in recent years… PPPs play an important role in infrastructure programs.

    “Well-designed and properly implemented PPPs can supplement government-funded projects by mobilizing private capital and bringing in the private sector’s construction and managerial capacity,” says IMF Representative to the Philippines Yongzheng Yang.

    The Government needs a sound PPP framework and build enough capacity to manage fiscal costs and risks like contingent liabilities that could emerge from such an approach says Mr Yang.

    Byunghoon Nam, a senior economist at AMRO, says he sees no reason why the Philippines cannot take advantage of PPP-type projects, “as long as proper safeguards are in place to ensure that they are well designed and implemented.”

    Meanwhile, the Government should tap the private sector to help with its massive infrastructure drive, says former socioeconomic planning secretary Ernesto M. Pernia.

    “I have always tended to favor smartly chosen PPP projects… they can ease the burden on the Government’s fiscal position, while making sure the costs and benefits are well balanced between public and private sectors such that it’s a win-win arrangement for both. More PPP projects should be encouraged, which is also ADB’s policy stance,” says Mr Pernia. (JD/The MiNT)

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