Standard & Poor's points out "long-delayed" PPP program as key to boosting GDP 

Global credit rating agency Standard & Poor’s (S&P) said Wednesday the implementation of the “long-delayed” public-private partnership (PPP) program is “the key task for the (Aquino) administration” this year parallel to the resilience of consumer spending and remittances from overseas Filipinos.   “We expect the prevailing stability and popularity of the Aquino government to enable continued fiscal consolidation, and to kick start the long-delayed PPP initiative to develop the country's infrastructure,” S&P analyst Agost Benard said in a report entitled “Asia-Pacific Sovereigns: Mixed Outlook in an Uncertain Year.”   S&P upgraded last December the outlook of the country’s credit rating over the next 12 months to positive from stable—a move which may bode well for an upward revision in the credit rating itself.   Thus far, the Aquino administration has awarded only one PPP project and the winning bid of P902 million was by Ayala Corp. for the Daang Hari-South Luzon Expressway link road. Ayala Corp. partnered with the Spanish engineering group Getinsa Ingineieria for the project. This was back in December.   “The Daang Hari project is a four-kilometer, four-lane paved toll road that will pass through the New Bilibid Prisons reservation that will connect Bacoor, Cavite, to the SLEX through Susana Heights,” according to the PPP Center of the National Economic and Development Authority (NEDA).   The PPP also said three projects are in the “pre-investment financing support” study phase. These involve the operation and maintenance of the Angat hydroelectric power plant, the “New Water Supply Source Project” for Metro Manila and the establishment of a “cold chain system” for perishable goods.   The Department of Education has also sought bids for the construction of about 9,000 classrooms in the Ilocos, Central Luzon and Calabarzon regions. DepEd said if conventional methods are applied, it would cost the government about P10 billion to P11 billion to build these classrooms. The expectation is that it would cost less if the private sector undertakes the construction.   Budget deficit, public spending   S&P analyst Benard also said the national government is making further gains in the management of its finances. He expects the budget deficit to fall 1.6 percent of gross domestic product (GDP) this year from last year’s level of about two percent last year.   “The positive outlook is based on our expectation that continued adherence to fiscal consolidation, combined with improved medium-term growth prospects, will further moderate the Philippines' public debt and interest burden,” he said.   He noted however that the country continues to have a narrow tax base and high public sector debt.   GDP growth of 4.2 percent this year is the S&P projection for the Philippines. This forecast matches that of the International Monetary Fund, which has been assured by administration economic managers of faster and effective rollout of infrastructure spending because of budget reforms, including the use of a program of work for every project. The Philippine Institute of Development Studies, a think tank and attached agency of the NEDA, said Wednesday GDP could grow by 5.6 percent this year and that among the generators of growth—aside from government spending—are the manufacturing and services sectors.. — ELR, GMA News