THE Marcos administration aims to create an “omnibus” public-private partnership law that will push for the consolidation of all infrastructure undertakings between the government and the private sector.
In a briefing on Monday, National Economic and Development Authority (Neda) Undersecretary for Investment Programming Joseph J. Capuno said this law would consolidate several rules that currently exist on PPPs.
Capuno gave assurances that the omnibus law will take into consideration efforts to safeguard the national interest and allocate the risk between the private and public sectors.
“We want to amend the law in such a way that we incorporate joint venture agreements between local governments and private sectors so that we don’t have too many laws, you know, governing public-private partnerships. We want one, as if it were an omnibus law that will govern all partnership agreements with the private sector,” Capuno said.
Capuno added that the omnibus “shouldn’t only be probusiness; it shouldn’t be only progovernment” to protect all stakeholders. He said new policies will also be included in the law that previous rules have been silent on.
In September, the government released the latest version of the Build Operate Transfer (BOT) Law Implementing Rules and Regulations (IRR) which is expected to entice more private sector players to participate in public infrastructure projects.
One of the major changes is on the definition of the Material Adverse Government Action (MAGA) which now covers all government actions, and not just the Executive branch.
If these government actions discriminate against the proponent and have an adverse effect on its ability to undertake the project, the contract can be terminated and termination payment will be due to private proponents.
Apart from the omnibus law on PPPs, Capuno said a priority goal for Neda is to raise the minimum threshold or the thresholds for projects to be elevated to the Neda Board for approval, given the increase in inflation.
In 2017, the Neda Board raised the Investment Coordination Committee (ICC) threshold to P2.5 billion from P1 billion. This meant only projects costing P2.5 billion and over will be evaluated by the Neda.
However, Capuno did not indicate any proposed threshold as of press time, saying only that the minimum threshold will be raised to take inflation into account.
Based on the latest Philippine Statistics Authority (PSA) data, the Construction Materials Retail Price Index (CMRPI) in the National Capital Region posted a 6.6-percent growth in October 2022.
This is lower than the 6.8 percent posted in September 2022 but significantly higher than the 2.1 percent posted in October 2021. Year to date growth of the CMRPI was at 5.8 percent.
Maharlika as fund source
Meanwhile, Socioeconomic Planning Secretary Arsenio M. Balisacan said improvements in the country’s infrastructure program, particularly on projects, will be included in the Public Investment Program (PIP) for 2023-2028.
The PIP is the accompanying document to the PDP and will outline the current administration’s projects to achieve the targets set in the PDP.
Meanwhile, Balisacan said the Maharlika Investment Fund (MIF) could be tapped as another source of funding for infrastructure projects similar to Official Development Assistance (ODA) and the National Budget.
Balisacan said if MIF approval could be done earlier, that would be better for the PDP. The fund, he said, could complement the implementation of the country’s socioeconomic blueprint.
“We see the Maharlika as another vehicle for sources of funds and investment, just like PPP is one vehicle, ODA is one vehicle, GAA is another. The more vehicles we have, the better and that will ensure that we can ramp up not only the infrastructure but even the other priorities of the government, development priorities,” Balisacan said.
Using the MIF for infrastructure projects, Balisacan said, would be helpful given the narrow fiscal space the government now has after Covid-19-related spending.
The aim of the fund, Balisacan said, is to pool funds together so that government can invest them in critical areas such as those for infrastructure development.
What is important is for the fund to have a mixed portfolio on where to invest and ensure that its investments are maximized, he said.