Finance Secretary Ralph G. Recto has welcomed the remittance of a PHP 30-billion upfront payment from San Miguel Corporation-led New NAIA Infra Corp. (NNIC) for the Ninoy Aquino International Airport (NAIA) Public-Private Partnership (PPP) project, which will boost the government’s non-tax revenue stream without the need to impose new taxes on the people.

“We are hitting two birds with one stone on this project. This will not only transform NAIA into a world-class airport but also guarantees the government a healthy income stream from the private sector operator,” the Finance Chief said.

“The 30 billion pesos is just the upfront payment from the private sector partner. As the project finally takes off, the government is expected to generate roughly 900 billion pesos in revenues from this deal over the entire term, which is a 15-year concession period, extendable by another 10 years. This will be equivalent to a revenue source of more or less 36 billion pesos annually to fund more projects in education, public health, and infrastructure,” he added.

The remittance from the Manila International Airport Authority (MIAA) cleared with the Bureau of the Treasury (BTr) on September 16, 2024, following the official turnover of the NAIA’s operations and maintenance (O&M) to NNIC on September 14, 2024.

With an estimated project cost of ​​PHP 170.6 billion, the proposal to rehabilitate NAIA is the largest PPP project under President Ferdinand R. Marcos, Jr.

The project aims to address the longstanding challenges of undercapacity, congestion, and underinvestment in the country’s main gateway.

Led by the Department of Transportation (DOTr) and the MIAA as co-grantors of this solicited PPP, the NAIA rehabilitation is expected to increase airport capacity from 35 million passengers annually to 62 million and expand air traffic movements per hour from 40 to 48.

The project improves service by applying internationally benchmarked Minimum Performance Standards and Specifications and utilizes private sector expertise for modernization and capacity expansion.

The NAIA project was approved by the NEDA Board, chaired by President Ferdinand R. Marcos, Jr., on July 19, 2023. It was evaluated within a record-breaking six weeks––the fastest approved PPP proposal in Philippine history.

The Department of Finance’s (DOF) Privatization and Partnerships Group (PPG) is responsible for evaluating solicited and unsolicited PPP proposals, which undergo a rigorous screening process before they are submitted to the Investment Coordination Committee (ICC) and NEDA Board.

On February 16, 2024, the MIAA board awarded the contract for the project to the SMC-led consortium, which submitted the highest bid parameter.

The proponent is providing a PHP 30 billion upfront payment, a fixed PHP 2 billion annual payment, and 82.16% national government revenue share, excluding passenger service charges.

The Concession Agreement (CA) for the project was signed by the Department of Transportation (DOTr), the MIAA, and the SMC-led consortium on March 18, 2024.