TOKYO—Finance Secretary Carlos Dominguez III has called on institutional investors managing Asian pension and sovereign wealth funds to take part in the Philippines’ economic emergence by investing in the country’s $170-billion infrastructure modernization program.

Dominguez told members of the Asia Pacific Investors Cooperation (APIC) network that now is a good time to build partnerships with the Philippines, which has emerged as one of the main growth engines in the region and which aims to sustain this status by embarking on its ambitious infrastructure program “with a great sense of urgency.”

“The modernization of our infrastructure and our governance will bring enhanced connectivity to the Philippine economy. They will open many opportunities for the global investment community. I hope that you will examine our on-going programs and decide to participate in the strong emergence of the Philippine economy,” Dominguez said during the APIC meeting held at the Shangri-La Hotel here.

APIC is a private network exclusively created by and for Asian sovereign wealth funds, government funds, central banks, and public and private pension plans.

Its meeting, held on June 21, focused on discussions about investments prospects for foreign pension funds in the Philippines’ “Build, Build, Build” infrastructure program.

Dominguez said that in the Philippines, state pension funds also play a role in funding infrastructure projects, as he cited the investments made by the Government Service Insurance System (GSIS) in this field.

The GSIS, according to Dominguez, invests in private infrastructure assets through the Philippine Investment Alliance for Infrastructure, which is the first private equity fund earmarked for the country’s infrastructure projects. Among the investments made under this fund include solar power and wind farm projects, power plants and railways.

Dominguez said that to speed up the implementation of its massive infra program comprising 75 flagship projects, the Philippine government continues to streamline its institutional processes on approvals and execution and has also introduced the “Build, Build, Build” Portal to enhance transparency and fast-track project implementation.

“It is our desire to see the strategic projects completed at the shortest possible time in order to immediately realize their economic value and lessen unnecessary financing costs,” Dominguez said.

The Duterte administration’s economic strategy, Dominguez said, is anchored on two major programs: the infrastructure buildup and its comprehensive tax reform program (CTRP) that would generate the robust and reliable revenue flows needed for the cash-intensive “Build, Build, Build.”

CTRP’s first tax reform package which lowered personal income tax rates for 99 percent of the taxpaying population, raised revenues in the first quarter of 2018 that exceeded expectations, Dominguez said.

Dominguez said that following the implementation of this first package called the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the tax effort rose from 13.4 percent of GDP to 14.3 percent, which is the highest first-quarter tax effort that the Philippines has achieved in the past 25 years.

The second tax reform package on reducing corporate income tax rates and modernizing fiscal incentives is expected to “consolidate” this robust revenue trend, he said.

Of the 75 high-impact infra projects under the “Build, Build, Build,” Dominguez said 35 have already gone through the approval process and are now ready for execution.

Dominguez said that besides the tax reform program, the Philippines’ $170-billion infrastructure program will be financed through the following: 1) increased Official Development Assistance (ODA) flows from Japan and China, which have committed $9 billion each worth of investments and ODA, and Korea, which has pledged up to $1 billion; 2) investments from multilateral institutions such as the Asian Development Bank, World Bank and Asian Infrastructure Investment Bank, 3) floating bonds at investment-grade rates, and 4) hybrid Public-Private Partnerships in which the government undertakes the projects and completed ones are passed on to private partners for management or acquisition.

He cited as an example the contract to upgrade the passenger terminal of the Clark International Airport, which was awarded to a Filipino-Indian consortium. This is the first big-ticket hybrid PPP project under the Duterte administration.

The government, Dominguez said, has combined loans and grants from these funding sources, “to arrive at economically astute and technically superior designs for the projects we intend to undertake.”

He said the Duterte administration plans to increase infrastructure investments from 6.3 percent of the gross domestic product (GDP) in 2018 to 7.3 percent by 2022 through its 75 flagship projects.

“We are preparing to grow our economy at 7 percent this year. At that rate of expansion, and with strong investment inflows contributing to more inclusive growth, we hope to bring down the poverty rate to only 14 percent by 2022,” Dominguez said. “That is the most important number we hope to make. All development efforts will be meaningless if they do not translate into liberating people from the curse of poverty.

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