Philippines Performs Well in PPP Projects: ADB

The Asian Development Bank (ADB) said the Philippines had a total of 119 projects under public-private partnership (PPP) since the government enacted the Build-Operate-Transfer (BOT) Law in 1990.

ADB’s PPP Monitor, its first annual report monitoring progress of PPP environment in member countries, showed that these PPP projects were valued at USD56.9 billion.

The report, which was launched Thursday, also noted that 65 percent of PPP projects in the Philippines were in the energy sector.

This also reflects the key trend in PPP among nine countries in the report — Bangladesh, China, India, Indonesia, Kazakhstan, Papua New Guinea, the Philippines, Thailand, and Vietnam.

“Among the key trends identified in this year’s report is that energy generation is one of the most successful sectors in developing PPP frameworks,” the report read.

“Thermal and renewable power generation are the dominant sectors for the majority of the countries surveyed in the PPP Monitor,” it added.

The ADB report showed that the Philippines has 77 PPP projects under energy sector, 27 in transport sector, seven in information and communications technology, six in water sector, and two social infrastructure.

“The Philippines has performed well during the recent years led by sound policies of successive administrations,” the PPP Monitor stated.

It listed five key developments between 2014 and 2016 to boost PPP projects in the country, which include amending the BOT Law through a PPP Act and the approval of the Securities and Exchange Commission of the listing of PPP firms to the Philippine Stock Exchange to widen the source of equity funding for the projects, among others.

However, the ADB report said in the country’s infrastructure spending was among the lowest in the Asia Pacific region, which was only equivalent to an average of 2.2 percent of gross domestic product (GDP) from 2011 to 2014.

The current administration, since it took into office in 2016, targets to boost infrastructure spending to 7.0 percent of GDP by 2022.

The ADB report also noted that foreign ownership restriction in the country limits local infrastructure development.

“Although much has been achieved in developing the PPP market in the Philippines, the PPP Monitor finds that there still remain challenges, and one of which is that the current limit of 40 percent for foreign ownership of equity may restrict competition for infrastructure development in the country,” it said.

Meanwhile, in over two decades, largest value of PPP projects among the surveyed countries was in India amounting to USD314 billion for 861 projects, followed by China with USD139 billion, the Philippines with USD56.9 billion, Thailand with USD38.8 billion, Bangladesh with USD19.3 billion, Indonesia with USD18.6 billion, Vientam with USD16.2 billion, Kazakhstan with USD5.25 billion, and Papua New Guinea with USD140 million.