NEWS

By Melissa Luz Lopez

Metro Manila — Focus has returned on public-private partnerships (PPPs) as the Duterte administration is hard-pressed to deliver more infrastructure projects by 2022, a global think tank said.

Public-private partnerships will retake the spotlight as the Duterte administration is hard-pressed to deliver more infrastructure projects by 2022, The Economist Intelligence Unit says.

In a commentary published Thursday, the Economist Intelligence Unit (EIU) said PPP deals would likely retake the spotlight as the government struggles to catch up with big-ticket construction projects under the “Build, Build, Build” program.

The EIU said the Philippine economy has long been dragged by “underdeveloped” infrastructure, which as kept foreign direct investments down and rendered ₱3.5 billion in missed economic opportunities daily, according to the Japan International Cooperation Agency.

Three years into the Duterte administration, the EIU said progress on big-ticket projects has been slow and will likely remain a struggle for the rest of the President’s term.

However, it noted that the appointment of Bases Conversion and Development Authority President Vivencio Dizon as Presidential Adviser for Flagship Programs and Projects in September would usher changes as to how construction is carried out.

“We believe that Mr. Dizon’s appointment will lead to more infrastructure projects being executed through PPP, because such projects tend to be implemented more quickly than those financed by GAA (General Appropriations Act) and ODA (official development assistance),” it added.

From the old list first released in November 2016, only 32 remained while 68 new projects have been included, dropping bridges that will take too long to build in favor of local road construction projects. ODA will dominate funding sources for the projects, while 24 will be financed via PPP and two will rely on full private funding. The national government will foot the bill for 23 priority items.

Duterte previously shifted towards foreign loans and grants known and shied away from PPPs, saying projects under this arrangement took too long to build. Japan and China have committed to fund several projects. However, critics have questioned choosing China as a partner, questioning the terms of the deal for the Kaliwa Dam.

Now, authorities became more receptive to PPPs and unsolicited proposals as long as these do not carry “disadvantageous” provisions for the state.

“The Economist Intelligence Unit maintains its view that the authorities will struggle to complete the bulk of its infrastructure agenda before the next presidential election in 2022,” it said in the report.

The list of priority projects has been revamped, with new projects dominating the longer pipeline which now includes 100 items from 75 three years ago.

From the original list, only two projects have been completed, halfway through Duterte’s six-year term.

The research firm added that the shortage in skilled workers has been affecting output, considering that many Filipino laborers “prefer more lucrative employment in the Middle East” where they earn higher income.

Other issues bogging down construction include relocating displaced residents from project sites, as well as the sluggish pace of the rollout of China-funded projects. Infrastructure projects were likewise stalled earlier this year, due to the four-month delay in passing the national budget, coupled with a public works ban running up to the May 13 elections.

Dizon earlier said he expects 38 projects out of the new list completed by 2022, while the rest would be up for the next administration to finish.

“Nevertheless, the shortage of local expertise and skilled workers, as well as red tape, such as constitutional limitations on foreign ownership of public utilities, work in the opposite direction, so there will be no quick fixes to the bottlenecks that plague the infrastructure programme,” the EIU said.

“As a result,” the EIU concluded, “Mr. Duterte is under considerable pressure to deliver a marked improvement before the 2022 election, when he expects his daughter, Sara Duterte-Carpio, to take over the presidency.”

Source: CNN Philippines