Finance Secretary Benjamin E. Diokno shared the government’s commitment to productive spending through investments in infrastructure that will boost economic growth during the Manila Times Midyear Economic Forum, entitled “The Financial Play After the Halftime Replay”, on June 27, 2023.
The event engaged government officials, economists, and members of the business community in discussions on crucial economic matters to address obstacles to growth and chart a comprehensive plan for the second half of 2023.
“To ensure that our growth outpaces our debt, productive spending will be of paramount importance. Hence, infrastructure spending must be kept at 5 to 6 percent of GDP annually or around 1.3 to 2.3 trillion pesos each year until 2028,” Secretary Diokno said in his pre-recorded message.
The government will bank on investments in infrastructure to generate revenues and employment in the country.
Just last month, the National Economic and Development Authority (NEDA) released the Public Investment Program (PIP) 2023 to 2028, which contains 3,770 infrastructure priority programs and projects with an indicative investment requirement of PHP17.3 trillion as of March 20, 2023.
Target sectors include transportation, agriculture, energy, digital connectivity, and water infrastructure, among others.
According to Secretary Diokno, designing a sound and effective public-private partnership (PPP) framework will be crucial in financing big-ticket infrastructure projects.
To this end, the government has taken the necessary steps to improve the efficiency and transparency of the PPP mechanism through reforms, including the revised implementing rules and regulations (IRR) of the Build-Operate-Transfer (BOT) Law, the revised Investment Coordination Committee (ICC) Guidelines on PPP approvals, and the revised NEDA Joint Venture (JV) Guidelines.
The revised BOT Law IRR determines the true cost of infrastructure or development projects to the government, consumers, and taxpayers. This ensures that the benefits and risks of PPP projects are shared equitably among all parties while protecting national interests.
Furthermore, new oversight mechanisms were introduced to safeguard compliance with PPP obligations by both implementing agencies and private sector applicants.
The revised NEDA JV Guidelines were aligned with the revised BOT Law IRR and designed to enhance competition for projects under JVs, as well as strengthen checks and balances to ensure the technical and financial viability of government projects.
Meanwhile, the revised ICC Guidelines on PPP approvals significantly cut existing timelines for the submission, evaluation, and approval of PPP projects.
The government is also pursuing the passage of the proposed PPP Act or Senate Bill (SB) No. 2233, which is currently pending second reading. The bill was certified as urgent by President Ferdinand R. Marcos, Jr. on May 31, 2023.
“We are optimistic that the bill will be approved by Congress within the year,” Secretary Diokno said.
The bill provides for a unified legal framework for all PPPs covering all types of PPP arrangements at the national and local levels, increases approval thresholds for national PPP projects, and improves the framework for unsolicited proposals, among others.
