FINANCE Secretary Carlos G. Dominguez III has called on institutional investors managing Asian pension and sovereign wealth funds to take part in the Philippines’s economic emergence by investing in the country’s $170-billion infrastructure modernization program, or its “Build, Build, Build” program.
Dominguez told members of the Asia Pacific Investors Cooperation (APIC) network that now is a good time to build partnerships with the Philippines, which has emerged as one of the main growth engines in the region and aims to sustain the status by embarking on its ambitious infrastructure program “with a great sense of urgency,” according to the Department of Finance (DOF).
“The modernization of our infrastructure and our governance will bring enhanced connectivity to the Philippine economy. They will open many opportunities for the global investment community. I hope that you will examine our ongoing programs and decide to participate in the strong emergence of the Philippine economy,” Dominguez said at the APIC meeting held at the Shangri-La Hotel in Tokyo, Japan, on Thursday.
The APIC is a private network exclusively created by and for Asian sovereign wealth funds, government funds, central banks and public and private pension plans.
The finance chief explained that, in the Philippines, state pension funds also play a role in funding infrastructure projects, as he cited the investments made by the Government Service Insurance System (GSIS) in this field.
The GSIS invests in private infrastructure assets through the Philippine Investment Alliance for Infrastructure, which is the first private equity fund earmarked for the country’s infrastructure projects. Among the investments made under this fund are solar power and wind farm projects, power plants and railways.
“It is our desire to see the strategic projects completed at the shortest possible time in order to immediately realize their economic value and lessen unnecessary financing costs,” he added.
The finance chief also pointed out that, besides the country’s tax-reform program, the Philippines’s $170-billion infrastructure program will be financed through the following: increased Official Development Assistance flows from Japan and China, which have committed $9 billion each worth of investments; as well as from South Korea, which has also pledged up to $1 billion in ODA; investments from multilateral institutions, such as the Asian Development Bank, World Bank and Asian Infrastructure Investment Bank; floating bonds at investment-grade rates; and hybrid public-private partnerships in which the government undertakes the projects and completed ones are passed on to private partners for management or acquisition.
The government, Dominguez said, has combined loans and grants from these funding sources, “to arrive at economically astute and technically superior designs for the projects we intend to undertake.”
The Duterte administration plans to increase infrastructure investments from 6.3 percent of the country’s GDP in 2018 to 7.3 percent by 2022 through its 75 flagship infrastructure projects.
The Tokyo visit of Philippine government officials from June 18 to 21 includes a Philippine Economic Briefing, the second to be held in Tokyo since last year, and the fifth regular meeting of the Philippines-Japan High-Level Committee on Infrastructure and Economic Cooperation.