A government that is friendly to public-private partnerships (PPPs) like the current Marcos Jr. administration is helping big-ticket infrastructure projects take advantage of tycoons' deep pockets, according to the World Bank.
In a Nov. 13 blog, World Bank advisor on infrastructure and climate finance Jyoti Bisbey said the Philippines is considered a "good representation" of successful PPP programs.
"The evolution of the PPPs in the Philippines reflects a journey of policy and regulatory reforms from a build-own-transfer (BOT) law to the PPP Act, institutional strengthening of the PPP Center, and the creation of funds to ensure a continuous pipeline of projects and reduce project risks," Bisbey noted.
"The shift to a programmatic approach has supplied the market with a continuous pipeline of PPP projects, enhancing the local financial and private sector development" here in the country, she added.
In its PPP Ecosystems Case Studies, also covering Colombia and Kenya, the World Bank pointed out that in the case of the Philippines, "it would be clearly observed that PPPs have thrived when the policy to pursue PPP is driven at the highest level of government.
"This was very apparent during the administrations of Presidents Ramos, Aquino III and now Marcos Jr.," the Washington-based multilateral lender said.
"There may be a well-laid out legal framework but if there is no leadership pushing for projects to be implemented via PPP, the program would not thrive," it added.
To recall, the previous Duterte administration shunned PPPs, fearing the ballooning contingent liabilities that came with projects shared between the government and the private sector.
But the present administration has turned to PPPs to augment resources for its ambitious "Build Better More" infrastructure program, as the Covid-19 pandemic left a yawning budget deficit that the government wanted to narrow by the time President Ferdinand R. Marcos Jr. steps down from office in 2028.
On the regulatory front, the Marcos Jr. administration revised the implementing rules and regulations (IRR) of the BOT Law in 2022, enacted the PPP Code of the Philippines under Republic Act (RA) No. 11966 last year, and then came out with this new law's IRR this year.
The World Bank noted that RA 11966's implementing guidelines "overhaul and clarify the steps in approval of a PPP and mandate approval service standards—in effect, time to approve" partly because of its "deemed approved" wherein "if the authority does not act by the service standard duration, legally, the assumption is that the project passes to the next stage."
"This will significantly reduce the time for approval," the World Bank said.
In a World Bank report titled "Benchmarking Infrastructure Development - PPP Regulatory Landscape: Assessing Quality and Exploring Reforms" published last September, the Philippines garnered relatively high scores in three themes: 95 in contract management, 79 in preparation, and 75 in unsolicited proposals—above-average globally as well as compared to those of its regional and lower-middle-income group peers.
However, in a scoring system with 100 as the highest for PPP legal systems, the country scored only 58 in procurement, below the global average but at par in the region and its income group.
According to the World Bank, 22 PPP projects worth over $6.9 billion in investment commitments reached financial closure between 2014 and 2018 in the Philippines.