Standard Chartered Bank has expressed interest in providing financial and technical assistance to the Philippines in implementing the proposed railway system in Mindanao under the Duterte administration’s “Build, Build, Build” infrastructure program, according to the Department of Finance (DOF).
In a recent meeting with Finance Secretary Carlos G. Dominguez III, Standard Chartered officials offered assistance in terms of bank services to facilitate the conversion of the Development Bank of the Philippines (DBP) as the country’s infrastructure bank.
Also discussed at the meeting was the Philippines’s plan to sell renminbi-denominated Panda bonds starting this year, the Duterte administration’s proposed Comprehensive Tax Reform Program, the national identification system, the rehabilitation of the Agus hydropower plants in Mindanao and the possibility of offering green bonds and project bonds to help finance the country’s infrastructure buildup.
“There are five projects approved by the National Economic and Development Authority, and the largest is the railway project in Mindanao. We want to see how we can help there. We also want to clarify how we can help [the] DBP [in] becoming an infrastructure bank, putting up an infrastructure fund or providing advisory [services],” said Lynette V. Ortiz, CEO and country head of the bank’s Global Banking division for the Philippines.
Dominguez cited major railway projects under the Duterte administration, including the Manila-Clark commuter railway project that is expected to commence between October and December this year; the proposed Mega Manila Subway with its first phase running from the Ninoy Aquino International Airport to Quezon City; the Calamba-Bicol railway; the Manila Metro Rail Transit System 7 project from Manila to Bulacan; and the first stage of the Mindanao Railway project connecting the cities of Digos in Davao del Sur and Tagum in Davao del Norte.
“The whole idea is, we believe, we’re so far behind our neighbors on infrastructure, and it just makes sense to spend money on it. But we’re not going do it the way they did it in the past. Doing it through PPP [public-private partnership] takes so much time. Our administration is willing to start the projects, and outsource the operations and maintenance later. It will allow people who are averse to take the construction risks to come in,” Dominguez said.
As for Standard Chartered’s offer to assist the DBP’s conversion into an infrastructure bank, the finance chief said the DBP welcomes the assistance offered by the bank.
“We really like to partner with you on this. [DBP President and CEO] Cecille [Borromeo] will welcome working with you, especially with your experience in Asia,” he added.
Meanwhile, Anna Marrs, the bank’s regional CEO for Southeast Asia, described the Duterte administration’s infrastructure plan as an ambitious agenda, but pointed out that the government might as well achieve it.
Dominguez also informed the Standard Chartered officials that the government intends to rehabilitate the Agus hydropower complex in Mindanao to ensure the island’s energy security.
“We’ll rehabilitate those, and bid out their operations and maintenance. That will be a few years down the road. But this is the time to do it, because we have excess power in Mindanao at the moment,” Dominguez said.
The government’s massive infrastructure program could lead to a shortage in manpower and skills, owing to the large labor demand for the projects, according to the finance chief. But he assured the bank officials that the government is counting on overseas Filipino workers scattered across the globe to return home and help build these projects.
Earlier, the DOF said the adoption of hybrid PPPs will enable Filipinos to feel the immediate benefits of improved infrastructure in the country, because it will speed up the construction pace.
Under the hybrid PPP approach, the government will handle the construction of the infrastructure project with funds coming from sources, such as official development assistance and government funds, among others. After completing the project, the operations and maintenance will then be auctioned off to the private sector.