BEYOND BUDGET
Assalamu alaikum wa Rahmatullahi wa Barakatuh.
Last Sept. 27, 2023, we, in the administration of President Bongbong Marcos (PBBM), welcomed the news that the Senate ratified the Bicameral Conference Committee Report on the Disagreeing Provisions of Senate Bill No. 2233 and House Bill No. 6527 or “An Act Providing for the Public-Private Partnership (PPP) Code of the Philippines.”
We are delighted by this development, as our nation is one step closer to finally having a law that will strengthen the PPP framework, fostering project proponents' confidence and ensuring that the government chooses the best options. The law defines PPP as an agreement between the implementing agency and a private proponent for financing, planning, development, construction, operation, and maintenance of infrastructure projects. It will address the country’s infrastructure shortage, update approval thresholds for national PPP projects, and create a consistent legal framework for all PPP at municipal and national levels. It makes projects affordable, provides better value for money, allows both parties to share risks and responsibilities, focuses on outputs and benefits, ensures quality, encourages sector reform, and promotes innovation.
I agree with the President when he said during his SONA that collaboration is key, and a whole-of-society approach is needed to reduce government spending and improve the quality of projects in our bid for inclusive and sustainable prosperity. PBBM's Build, Better, More infrastructure initiative is expected to cost around ₱8.74 trillion, with 197 large-scale infrastructure flagship projects, 49 of which are to be funded through PPP and hybrid PPP.
With this news, our international partners complimented our country for undertaking this crucial structural initiative. The International Monetary Fund Article IV Consultation Mission Team led by Mission Chief Shanaka Jay Peiris, in its preliminary report, commended our country for the renewed emphasis on PPP and appreciated that the Act codifies fiscal risk assessment in the early stage of PPPs. Meanwhile, the International Finance Corporation, the World Bank's private sector investment arm, lauded the Philippines’ new and improved policy framework for PPPs, highlighting the PPP Code's ability to help bring in more domestic and international investments in infrastructure.
And as a testament to our administration’s recognition of the role of the private sector in development, World Bank’s Private Participation in Infrastructure (PPI) 2022 Annual Report found that the Philippines was among the top 10 destinations for PPI in 2022. In fact, our PPI as percent of the investment commitments in infrastructure projects with private participation in low- and middle-income countries in East Asia and the Pacific stood at seven percent with China at 70 percent, Vietnam at 10 percent, and Indonesia at nine percent.
PPP projects
I believe that the enactment of the PPP Code is timely, as the government ramps up infrastructure development through strengthened partnership with the private sector.
Showing our commitment to PPP, the NEDA Board, chaired by no less than President BBM, has already held 10 meetings since November 2022, in which six PPP projects have been approved. Two of these were given the green light just recently, during the 10th NEDA board meeting last Oct. 13, 2023: The ₱392 million Dialysis Center Project for the Renal Center Facility of the Baguio General Hospital and Medical Center (BGHMC) under the Department of Health; and the ₱4.5 billion upgrade, expansion, operations, and maintenance of the Bohol-Panglao International Airport Project of the Department of Transportation (DOTr) and the Civil Aviation Authority of the Philippines (CAAP).
The Dialysis Center Project for BGHMC aims to retrofit its dormitory building into a functional dialysis center to increase the number of active hemodialysis machines from the current 30 to 108 by 2029. This will provide accessible and low-cost treatment up north, especially for the indigent who suffer from chronic renal disease, the 10th most common cause of death in the Philippines and one of the main causes of hospitalization.
Meanwhile, the CAAP-DOTr project aims to expand the capacity of the New Bohol International Airport by constructing a new passenger terminal and other buildings. The project integrates the concepts of “green” and “connected” airports into its design, operations, and maintenance, increasing the airport's capacity from two million to 2.5 million passengers per year at the start of the project. After the upgrade, it will further increase to 3.9 million passengers per year. Indeed, this will boost tourism, generate more jobs, and will have a multiplier effect not only for Bohol but also for the surrounding provinces.
Thus, according to the PPP Center, as of Oct. 13, 2023, there is a total of 181 PPP projects under implementation with an estimated project cost of ₱2,661.43 billion. Of these, 121 are under the national government and 60 are under the local government units.
Beyond budget, I believe that PPP is both beneficial and strategic. It encourages the private sector to participate in projects — capitalizing on their resources, technology, and expertise — while the government lends its legal and policy framework. It’s a win-win solution. And with the approval of the PPP Code by the President, the public and private sectors can work hand-in-hand to expand the government’s fiscal space, and to finance projects that will improve the country’s mobility, connectivity, productivity, as well as strengthen its trade, investments, and social protection systems to uplift the quality of life of every Filipino.
(Amenah F. Pangandaman is the current Secretary of the Department of Budget and Management.)