FINANCING infrastructure projects through Official Development Assistance (ODA) remains an option for the administration even if the government is open to reviving Public Private Partnerships (PPPs), according to the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Arsenio M. Baliasacan told reporters that ODA remains “in the mix” of financing options for infrastructure projects. Balisacan emphasized that what is important is for the government to be transparent about the financing arrangements.
“Our policy is whichever provides the cheapest and most beneficial arrangement. If it turns out that the ODA will deliver a better outcome, then we’ll do that,” Baliasacan said. “We’d like to see different sources of funding as a mix.”
The financing arrangement for infrastructure projects will have to go through a cost-benefit analysis in order to determine which financing option would be the most beneficial to the government.
He added that this exercise will also help determine the best ODA financing given that the terms of these loans are different per country. Balisacan said, for one, that Japan’s ODA is different from the ODA offered by China.
In terms of PPPs, Balisacan said issues raised against PPPs such as contingent liabilities calls on the government to improve the PPP model and find ways to maximize private sector support to address the country’s long-standing infrastructure constraints.
“We will definitely, revive, enhance [and] reinvigorate PPP… mot just to ease the fiscal burden—the fiscal space is very limited because of the debt—but second, PPPs also bring in innovations, institutional arrangements that improve the quality of services,” Balisacan said.
“Our job is to ensure that whatever we choose as a modality, that’s the most beneficial modality for society,” he stressed.
Planning, preparation
BALISACAN earlier said proper planning and preparation of strategies lie at the heart of Neda’s mandate. He assured the public that the Neda studies and coordinates projects and programs to ensure that the economy remains robust amid various challenges.
Balisacan said that among the programs that will help the economy better survive the challenging times is the continuation of the Build, Build, Build (BBB) program of the Duterte administration with the help of the private sector.
The Neda Chief said part of the BBB strategy is to reach out to the private sector through Public Private Partnerships (PPP). Neda, the parent agency of the PPP Center, will help ensure that these projects are “attractive” to the private sector, according to Balisacan.
In his first public address, President Ferdinand R. Marcos Jr. stressed that the national government will continue and expand Duterte’s infrastructure program.
Marcos said his administration will “keep the momentum” of infrastructure projects by not suspending any of the ongoing projects. Nonetheless, he said, they will study existing proposals.
By expanding the infrastructure program, the President said, the government will turn to PPPs which “hold great potential” in expanding infrastructure initiatives and even innovation efforts.