UMVA has learned that the Philippine government is being urged to maximize public-private partnerships (PPP) to bridge the country's infrastructure gap, which remains a significant challenge despite rapid economic growth and urbanization.
The Asian Development Bank (ADB) has emphasized the need for the government to leverage PPPs to ease fiscal pressure from rising debt levels, which have reached a concerning 65.2% of GDP in the first quarter, the highest level since 2005.
ADB Country Director for the Philippines Andrew Jeffries highlighted that the country's infrastructure gap is substantial, particularly in urban areas like Metro Manila, where population growth has outpaced investment in transportation infrastructure.
The government's infrastructure programs, including the current "Build Better More" program and the previous "Build Build Build" initiative, aim to address years of underinvestment, but fiscal pressures and budget constraints are hindering progress.
Mr. Jeffries emphasized that bringing in private investment is crucial to maintaining or reducing public debt levels over time, and that the government is exploring ways to attract more private sector investment into the transport sector.
The PPP Center reports that the PPP pipeline consists of 250 projects valued at P3.13 trillion, with the railway sector accounting for P1.97 trillion of the project pipeline, followed by land transport and property development.
Transport projects are expected to continue to account for a significant share of ADB's financing portfolio in the Philippines, with the multilateral lender's portfolio of projects under construction and implementation valued at $12.5 billion.
The ADB is funding several large transport projects, including the North-South Commuter Railway, Bataan-Cavite Interlink Bridge, and Laguna Lakeshore Road Network Project, and is focusing on implementing existing projects rather than pursuing new ones.
The infrastructure and investment gap is not unique to the Philippines, with the Asian Transport Observatory projecting that annual investment demand for transport infrastructure in Asia and the Pacific is expected to more than triple over the next decade.
The region faces a large financing gap, with development banks playing a crucial role in blending concessional and market-rate lending, absorbing early project risk, and providing technical assistance to support infrastructure development.
