Investment banks could help the Philippines achieve an P8.4 trillion infrastructure buildup in the next six years by exploring opportunities in the new “hybrid” public-private partnership (PPP) program, the Department of Finance (DoF) said in a statement on Monday.
“The PPP method takes too long to negotiate the terms of the agreement. We will initiate the project and decide at a certain point when to make it a PPP, perhaps towards the middle or towards the end. Investment banks like Nomura which are active in the capital markets may be able to help,” Finance Secretary Carlos Dominguez 3rd was quoted as saying in his May 4 meeting with top officials of the Nomura Group in Yokohama, Japan,
Dominguez earlier said the Duterte administration was adopting the hybrid PPP formula because it “wants to get things done quickly” in rolling out infrastructure projects, according to the DoF.
Under the hybrid PPP formula, the government selects, finances and builds big-ticket projects and, upon completion, auctions off the operation and maintenance (O&M) aspect to the private sector.
The meeting with Nomura officials was held on the sidelines of the 50th Annual Meeting of the Asian Development Bank in Yokohama early this month.
Nomura officials informed Dominguez of the bank’s new infrastructure team in Singapore, which will be tasked “to contribute to the region’s infrastructure projects, the Finance department said.
“They said Nomura’s strategies to tap the capital markets for fund raising and consolidating assets will ease the burden on banks and enable investors to meet the demands for funds for infrastructure projects,” the DoF said.
“Dominguez told them the Philippine government intends to kick off its infra buildup by developing the Clark International Airport in Pampanga, and possibly the Davao airport,” the department said.
Two of the largest projects under the P8.4 trillion “Build, Build, Build” program are the Manila-Clark Railway and the Mega Manila Subway to be funded with assistance from Japan, it added.
“Accelerating the implementation of the projects by having the government start them will be the strategy,” Dominguez noted.
Dominguez said the Plaridel Bypass Road and the Central Luzon Link Expressway (CLEx) are two hybrid PPP projects that started less than nine months after the Duterte administration took over the helm of government, a significant improvement from the usual 29 months that it takes for a traditional PPP project to get going.