PHL government considers sale of infrastructure bonds

The Aquino administration may finally push through with its plan to issue bonds to finance infrastructure projects under its public-private partnership (PPP) program, said Finance Secretary Cesar Purisima during the weekend.

 

Purisima explained that, while this had been considered at the start of the Aquino administration, the plan is now more doable. 

 

“As we now have more PPPs on stream, this becomes a more real option,” said Purisima. Also, the Aquino administration’s PPP program has been attracting significant interest from various investors. 

 

In 2010, the Aquino administration launched its PPP program as its flagship project for infrastructure investments, saying that this would help spur economic growth without over-burdening the government’s fiscal health.

 

The bonds, to be issued locally, may have long-term maturities of 20 to 25 years or less, depending on the terms or length of the infrastructure project.

 

However, these details including the issuing entity, have yet to be decided on.

  

Purisima said the planned infrastructure bond would complement the one set up by the Government Service Insurance System (GSIS), the state-owned pension fund for state workers.

 

The P25-billion GSIS fund, dubbed as the Philippine Investment Alliance for Infrastructure is in partnership with the Asian Development Bank, Dutch pension fund asset manager Algemene Pension Groep (APG) and Macquarie Infrastructure and Real Asset (MIRA).

 

For this year, the government is hoping to roll out eight PPP projects.  

 

The $1.4 billion LRT Line 1 Cavite Extension and Operations & Management contract as well as the $377.5 million Ninoy Aquino Expressway Phase II road project, are two of these.

 

Also, the government was able to bid out the Daang Hari Project and the $239 million-worth PPP For School Infrastructure Project Phase I.

 

Of the planned eight, three PPP projects are still waiting for the National Economic and Development Authority Board approval. These are the $466.8 million Cavite-Laguna Expressway, the $128.3 million-worth Modernization of Philippine Orthopedic Center and the $11.3 million Vaccine Self-Sufficiency Project Phase II.

 

Two projects, meanwhile, are also up for review by the Investment Coordination Committee. These are the $480.5-million North Luzon Expressway-South Luzon Expressway Connector and the $38.1 million O&M of the Angat Hydro-Electric Powerplant Turbines 4 and 5. — DVM, GMA News