THE Marcos administration is keen on pursuing solicited Public Private Partnerships (PPPs) to defray government costs in plugging the country’s long-standing infrastructure gaps, according to the National Economic and Development Authority (Neda).
In a briefing on Monday, Socioeconomic Planning Secretary Arsenio M. Balisacan said the President has made it clear to the economic team that he is keen on engaging the private sector in light of the government’s fiscal position.
Balisacan earlier said the new administration will continue ongoing and nearly completed infrastructure projects because these will boost efforts to address infrastructure constraints.
“Our discussions with the President signaled to us that he wants to engage the private sector which I think is a very good direction and given the fiscal space and the commitment of our government to serve its debt, we need to be able to still fund priority projects particularly infra or including infrastructure,” Balisacan said.
“We do think that we need to continue the infrastructure program because we do know that we are so lagging behind our neighbors but we have to be open-minded about where to source that funding for these projects,” he added.
Balisacan said, however, that the economic team recommended that these projects be solicited PPPs, as opposed to unsolicited PPPs. The reason: solicited PPPs will give the administration elbow room to identify projects aligned with their priorities.
Unsolicited projects are those proposed by the private sector. One such example of these projects is the Bulacan Airport which was proposed by San Miguel Corp.
Nonetheless, Balisacan said, making this a policy of the administration and rejecting outright unsolicited proposals cannot become a policy of the administration without the approval of the Neda Board.
“The Neda Board would have to make a decision on that but we have already discussed that. We have already mentioned to the President that moving forward we should go for more solicited projects but officially that would have to come out in a future Neda Board meeting,” Balisacan said.
Meanwhile, Balisacan said the President’s recent veto of the law creating the Bulacan Airport City Special Economic Zone and Freeport (BACSEZF) is not an indication of inconsistency on government’s part.
Balisacan explained that efforts to rationalize incentives have been the policy of the previous administration, particularly in the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
Based on his experience in government, incentives are not the only factors that influence investment decisions, he stressed.
Factors that have a greater weight in these investment decisions, Balisacan said, are regulations linked to ease of doing business—regulations such as opening a business, paying taxes, and closing a business, among others.
“We already sent the signal that we want a more transparent incentive system when we passed the CREATE law and the technical review board that comes with that law,” Balisacan said. “[The veto does not create] uncertainty. I think it will create more uncertainty if you pass the law and you are doing something else to undermine it.”
In an interview with Balisacan, he said encouraging greater private sector participation in government infrastructure projects requires addressing issues in Public Private Partnerships (PPPs) such as contingent liabilities and risk-sharing.
Balisacan said the government’s limited fiscal space remains the primary consideration when it comes to undertaking infrastructure projects.
He said the Marcos administration intends to continue the ongoing projects as well as those that were nearly completed by the Duterte administration. The pipeline, however, will have to be re-evaluated.