DoTC targets completion of 12 transport projects by 2019

THE DEPARTMENT of Transportation and Communications (DoTC) is targeting to complete over P258-billion worth of infrastructure projects by 2019, in line with the target timeline for the Japan International Cooperation Agency’s (JICA) P2.61-trillion Road map for Transport Infrastructure Development for Metro Manila and Its Surrounding Areas, known simply as the “Dream Plan”.

Transportation Spokesman Michael Arthur C. Sagcal said via text message on Sunday that the following projects are scheduled for completion from 2016 to 2019: the P30.40-billion Operation and Maintenance (O&M) of Iloilo Airport; the P40.57-billion O&M of Davao Airport; the P20.26-billion O&M of Bacolod Airport; the P5.23-billion O&M of Puerto Princesa Airport; the P15.92-billion Laguindingan Airport O&M; the P2.34-billion Enhanced O&M of the New Bohol (Panglao) Airport; the P64.9-billion Light Rail Transit Line 1 (LRT-1) Cavite Extension; the P63.14-billion Metro Rail Transit Line 7 (MRT-7); the P1.72-billion Automatic Fare Collection System; the P3.7-billion MRT-3 Capacity Expansion; the P9.7-billion LRT-2 Masinag Extension; and LRT-2 O&M.

“For our part in the Dream Plan, the DoTC’S mandate is to develop infrastructure which will help decongest traffic. Our rail projects will move commuters off of the roads and on to the rail systems,” said Mr. Sagcal.

JICA’s “Dream Plan” outlined a P520.44-billion short-term program for this year thru 2016 consisting of: P305.465-billion worth of expressways and roads; P178.823-billion worth of railways; P12.085-billion worth of sea ports; P11.368-billion worth of airports; P8.340 billion in bus systems; and P4.359 billion in traffic management projects.

Part of these initiatives are some of Transportation department’s projects, such as the MRT-3 Capacity Extension and LRT-2 Masinag Extension projects.

Pablito M. Abellera, who heads the Transportation Division of the National Economic and Development Authority’s inter-agency Infrastructure Committee, explained that an estimated 52% of the short-term program will be financed by a mix of official development assistance (ODA) and government funding, while the balance will consist of private sector investments.

“[F]or medium- and long-term projects amounting to about P2 trillion, a third of it will come from the private sector and the remaining is through the combination of government and ODA,” Mr. Abellera added.

The road map emphasizes the need to establish better north-south connectivity; a hierarchy of various transportation modes; planned and guided urban expansion to adjoining provinces through integrated public transport; the expansion of multi-modal public transport networks; and the strengthening of traffic management systems.

If the road map is implemented, JICA said it is expected to yield economic savings of P1.2 trillion a year starting 2030, public transport fare savings of P18 per person per day, travel time reduction by 49 minutes per person per trip, and additional toll and fare revenues of P119 billion annually. -- C.J.V. Dela Paz

source:  Businessworld

The bills that Congress must pass

THERE ARE three things on Congress’ plate now that we are keenly following, given their crucial role in keeping confidence and economic growth up in the very short term as well as over the longer haul.

The more immediate one is the President’s request for emergency powers to address a forecast shortage in electricity supply in the Luzon grid next summer. There is some urgency to this and we expect a favorable joint resolution from Congress, likely within the month. However, the burning issue is not whether or not emergency powers will be granted but what those powers will be.

There is now a tug of war between private players and the Energy department over the best option for filling the forecast 600 MW deficit. The private players believe that a well-managed Interruptible Load Program (ILP) that aggregates private companies’ self-generating capacities, together with energy conservation measures and more prudent plant management (including plant rehabilitation and scheduling of maintenance shutdowns), will be enough to close the gap.

So far, commitments to the ILP are less than 150 MW, about a 10th of available capacity, but the business sector is hopeful that with government providing the proper incentive framework, more will sign up. Overall, the main attraction of this packaged option is that government’s role is less heavy-handed and the ILP kicks in only at particular points in time, thus keeping added costs to a minimum.

While the Energy Secretary openly recognizes the value of these measures, he appears less confident that the ILP can produce the needed volume, and he prefers that the government contracted additional capacity to guarantee adequate supply. The fear among private players is that the government may end up with costly, extended contracts that not only burden taxpayers and/or end-users with needlessly high power bills, but which, beyond the critical summer months, will serve as government-owned reserve capacity that can be sold into the spot market, contravening the intent of the Electric Power Industry Reform Act (EPIRA). Several lawmakers have publicly expressed reservations about the government’s preferred option, also citing cost considerations.

Our best case here is a well-studied, time-bound resolution, clearly defining the parameters of the authority granted to the Executive that leaves little room for perceptions of abuse of powers to arise. Additionally, the resolution needs to be accompanied by clearer policy directions from the Energy Department and its regulatory arm that turn around perceptions of non-market-based price setting. This will help preserve private players’ confidence in the EPIRA, ensure that this episode is seen as a one-off case, and make needed private investments in additional generating capacity happen.

Second on our list is the Bangsamoro Basic Law (BBL), which we have tagged as a medium-term game changer on security and economic grounds. Although the Senate President is looking to pass the law in the first quarter next year, the best case here is passage by end of this year. This will give ample time for expected challenges to be resolved so that elections in the new autonomous region can be held within this administration’s term. It is also essential that the approved legislation is seen as preserving the terms that the Executive agreed with the Moro Islamic Liberation Front (MILF), which were the product of a long struggle and negotiation for peace. The short-term goal is to allow the current, more pragmatic MILF leadership to secure early wins and broaden support for the peace agreement in order to fend off the younger fundamentalist faction demanding greater autonomy. Over time, peace and security will help unlock Mindanao’s potentials. The island is rich in natural resources, its climate condition is conducive to agriculture, and historical and cultural ties will allow it to forge closer economic linkages with neighboring ASEAN communities in line with the aspirations of the ASEAN Economic Community.

Last but not least is the General Appropriations Act (GAA), the government’s budget for 2015. Following the controversies this past year, there has been increased and more intense scrutiny of the executive’s proposed expenditure items lately. Nevertheless, we are confident that just like the past four years, the budget will be passed on time, before the year ends. The proposed budget amounts to P2.6 trillion, a 15% increase over this year’s total appropriations. It is based on assumptions of 7-8% GDP growth, another P80-billion increase in the tax and revenue efforts to 15.5% and 16.5%, respectively, yielding a deficit of equivalent to 2% of GDP, about the same as this year’s target.

Budget officials have been stressing the importance of on-time passage of the GAA to enable the front-loading of priority expenditures, particularly infrastructure that should be completed before the start of the rainy season midyear. For 2015, the Aquino administration intends to bump up infrastructure spending to 4% of GDP (from 3.5% this year and 2.5% last year) and continues to raise allocations for education, health and the CCT program. Whether or not the government can in fact spend as planned to meet its growth and inclusivity targets is still a question mark as latest statistics (for August) show still anemic spending performance. On the other hand, we think there will be greater urgency for the administration to ramp up spending next year to secure political support for its candidates in the 2016 elections, especially for the Presidency.

Aside from the three, there is a slew of proposed economic reform measures that has been in the legislative mill for years, including a competition law for fair trade practices; amendments to the Build-Operate-Transfer Law to support the government’s Private-Public Partnership program; a bill clarifying the fiscal regime for the mining sector; and, in preparation for the AEC, liberalization of more areas for foreign investments, including a one-line “unless provided by law” amendment to free up economic restrictions in the Constitution.

The key piece, insofar as the short-term macro outlook is concerned, is the harmonization of fiscal incentives embedded in some 186 laws. Estimates put the cost of these incentives at 1-2% of GDP. Unfortunately, we expect that even if Congress approved this measure, it will likely be in diluted form. In fact going into an election season, we expect to see more revenue eroding proposals from Congress, with several bills lowering income taxes already under deliberation. We think the grounds for correcting long-term “bracket creep” on both equity and productivity are solid, and we do not expect these to appreciably dent public finances.

This column is based on a GlobalSource report written by Christine Tang and Romeo Bernardo.

Romeo Bernardo was finance undersecretary during the Cory Aquino and Ramos administrations, and board director of Institute of Development and Econometric Analysis Inc.

romeo.lopez.bernardo@gmail.com

source:  Businessworld

Managing risks in the mining and metals sector

THE MINING and metals sector in the Philippines is considered one of the key industries driving economic development and growth. Yet, it is also a sector that is constantly confronted with risks detrimental to the sector participants’ long-term profitability, and economic growth and sustainability. It is therefore important in strategic planning to anticipate and plan for these risks.

Many of these risks are consistent with the risks found globally, as identified in a recent Ernst & Young report titled Business Risks Facing Mining and Metals 2014-2015. These risks include:

RESOURCE NATIONALISM
Resource nationalism will remain a risk as the Philippine government looks to initiate legal and regulatory measures to increase its share from industry earnings. Early this year, the Philippines’ Mining Industry Coordinating Council approved the proposed mining revenue sharing policy which would impose either a 10% tax on gross revenue or a 55% tax on adjusted net mining revenue, plus a certain percentage of profit, whichever would result in higher revenues for the government. Additionally, a bill requiring domestic processing of all minerals extracted in the country prior to export was approved in early September at the committee stage of the House of Representatives. The bill aims to extract more value from mining.

To address this risk, mining and metals companies need to continue to dialogue with government on the impact on investment decisions of increasing levels of resource nationalism, whether in the form of taxes, use-it-or-lose it or in-country processing requirements. Companies need to continually demonstrate the benefits brought by the mining and metals industry to the broader community, and enhance the understanding that raising the cost of doing business may hinder investment and jeopardize those benefits for the country as a whole.

SHARING THE BENEFITS
Balancing competing demands from multiple stakeholders is a challenge for all mining and metals companies. Firms that fail to do so face the risks of damaging their corporate reputation, encountering project approval delays and protests or violent opposition. Companies need to ensure that these stakeholders have a common understanding of the challenges their projects face.

While there is no perfect approach that will appease all stakeholders, increased transparency helps generate trust with stakeholders. Transparency through reportorial requirements, such as the Social Development and Management Program progress reports, and participation of the Philippines in the Extractive Industries Transparency Initiative is a way to communicate how value is shared across all relevant stakeholders.

SOCIAL LICENSE TO OPERATE
Over the last few years, mining and metals companies have spent more time and resources grappling with an increasing number of groups in order to obtain or maintain their social license to operate. The risks in not obtaining acceptance from any one of these stakeholder groups can include lost potential investment streams, supply chain and customer base challenges, and reputational damage. This means that now more than ever, company leaders should take proactive measures that address the bigger industry picture. These measures should aim to develop policies beneficial to the company while also working to address the interests of the different stakeholders.

PRICE AND CURRENCY VOLATILITY
While the country’s mining output is slowly rebounding, price and currency volatility remains a significant risk to mining and metals companies. In addition, the industry is also facing much volatility in supply and demand, which means that prices cannot be expected to follow any definitive trend.

To manage this risk, companies can look at ways to enhance their flexibility to respond to these instabilities, which may include a preference for variable over fixed costs, improving their processes from more effective mine planning to increasing production efficiency, engaging in hedging, and mining high quality assets with better grades and better margins. Through such measures, the adverse impact on margins may be absorbed or be negligible.

INFRASTRUCTURE ACCESS
Since most of the untapped resources are located in remote areas, access to infrastructure is another barrier. It often falls on the company to initiate spending for developments such as roads, trails and bridges, and even social structures. While these expenditures comprise part of mine development costs, firms should view infrastructure development from a sustainability perspective, in that it provides a distinct social and economic benefit to local communities. This, in turn, helps mitigate the social license risks and visibly provides a means for companies to share the benefits of their operations with the community.

CAPITAL ALLOCATION
One of the most challenging decision-making areas in the mining business is identifying the best and most sustainable use of capital. A myriad of options are available, ranging from recycling of capital against dividend distribution, investing in and developing greenfields, acquisition of brownfields to disposal, and abandoning certain non-core projects/assets.

In one way or another, options considered by entities will likely benefit the shareholders. However, the complex part is determining how much money should be allocated to each action in order to yield the most benefit and generate as much wealth as possible to demanding investors. Mining and metals companies should zero in on the changing risk appetite of shareholders and their preferred funding mix.

CAPITAL ACCESS
Raising the capital requirement may not be the concern of large industry players but it defines survival for junior players and small-scale miners. Freestanding financiers may be reluctant to release funds to smaller mining and metals companies whose credit worthiness is uncertain. This can result in smaller companies encountering cash constraints and difficulty funding expansion projects. Consequently, cost and capital management remain essential. These companies should improve on their ability to curb high capital costs and mitigate credit risk. This includes exploring all financing options, reducing capital expenditures through incremental project design and considering strategic partnerships.

PRODUCTIVITY IMPROVEMENT
The sudden upsurge in physical commodity prices during the 2000s lured most of the mining and metals companies to focus efforts on increasing output without much regard to costs. However, when prices began falling dramatically a decade later, industry players realized that producing more does not equate to higher profitability where prices are depressed.

Mining and metals companies should embrace a significant end-to-end transformation of the whole business to deliver sustainable and long-term improvement. Strong financial performance can be achieved through productivity improvement such as reassessment of mining methods, favoring automation, and changes to overall mine plans.

Given the current issues and controversies plaguing the Philippine mining and metals industry, taking these risks into consideration may prove beneficial to our local players. In the long run, employing effective risk reduction and management exercises can help companies not only adapt to changing factors, but even thrive in this challenging environment.

Jaime F. Del Rosario is a Partner of SGV & Co.

source:  Businessworld

Small firms hard-hit by minimum wage – study

The government should consider the negative relationship between minimum wages and employment in its labor policy if it is really serious about creating jobs and pursuing inclusive growth, a study from a state think tank has concluded.

In its “Economic Issue of the Day” publication, the Philippine Institute for Development Studies (PIDS) featured a study authored by PIDS research fellow Vicente Paqueo, senior research fellow Aniceto Orbeta, and consultants Lorenzo Lanzona and Dean Dulay that revealed the damaging effects of increases in minimum wages on demand for workers in small firms.

The study found that small firms are hit hard by increases in the minimum wage and were forced to reduce the number of their
workers primarily because of scale effects.

“Because of competition from larger employers, they tend to offer higher pay just to attract workers. Small firms, thus, find it hard to mature into larger-scale firms, or are even forced to shut down, reducing the demand for workers,” the study said.

On the other hand, the study pointed out that larger firms benefit from the situation and are able to hire workers at lower starting salaries. Since large firms are unable to take in all the workers laid off by small firms, workers have no choice but to accept inferior arrangements.

It also said that in general, minimum wages appear to create significant employment effects unfavorable to the least educated, young workers, and women.

“This is likely because of the low levels of accumulated human capital and productivity compared with other workers. Employers would rather hire experienced workers rather than spend extra for training,” it said.

In the meantime, the state think tank said the authors acknowledge the aspirations of Filipinos for decent wages but challenge the idea that minimum wages and other labor regulations should be their “weapons of choice.”

They said alternatives include better education, increased labor-intensive manufacturing of tradable goods, and greater opportunities for on-the-job trading.

Since the minimum wage is also justified as a tool for social protection, general tax revenues should support part of it particularly the differential between the market wage and the socially determined suitable wage level, similar to the policy in Singapore, the authors said.

“In this way we will not sacrifice either of the twin desirable objectives of generating employment and paying socially determined wages. Achieving inclusive growth will require confronting the underlying causes of joblessness head on,” they said.

Meanwhile, in a recent forum, the authors of the study clarified that they are not calling for the abolition of minimum wage, rather, there should be a moderate minimum wage increases because they do not necessarily mean better incomes for the poor.

“If labor regulations stifle the incentive of firms to be productive and to employ people, then you are shooting yourself in the foot,” the authors said.

They added that the use of public revenues to reduce the gap between the wages generated by the market and what is socially considered decent wages should be looked at.

Enhancing the skills of workers will increase their chances of finding more productive jobs, which can be done by tapping training programs offered by the government, the authors said.

They also said that one option to finance on-the-job training is through co-financing by government, firms (through industry associations), and the workers themselves.

source:  Manila Times

P18-B NLEX-SLEX connector road project open to Swiss challenge

METRO Pacific Investment Corp.’s (MPIC) P18-billion North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) connector road project will be open for bidding after a government decision to subject the proposed four-lane expressway to a Swiss challenge.

Ramon Fernandez, Metro Pacific Tollways Corp. (MPTC) president, told reporters that government is indeed returning the project proposal, which will be open to a Swiss challenge.

A Swiss challenge is a form of public procurement that requires a government agency that has received an unsolicited bid for a public project or services to publish the bid and invite third parties to match or exceed it.

“We are disappointed,” Fernandez said, explaining that the project would help solve traffic congestion in Metro Manila.

Earlier, Philippine National Construction Corp. (PNCC) and MPIC signed an agreement for the construction of the connector road under similar terms as the existing MPIC concession rights for the operation of NLEX through the Manila North Tollways Corp (MNTC).

MPIC had proposed a 13.4-kilometer, four-lane expressway from Caloocan City to Makati City that will link the North and South Luzon expressways.

Last March 31, MNTC said that it might raise P10 billion in the fourth quarter this year to help finance the project. The company had cited two options: to create a new joint venture (JV), or to pursue the project using the existing franchise and amend the current Supplemental Toll Operations Agreement (STOA).

The MNTC earlier said that the directive from the government is to do a JV with PNCC.

PNCC holds the franchise for North Luzon Expressway and the South Luzon Expressway, while MNTC holds the STOA for Segment 9 and 10 of NLEX.

Segment 9 is a 2.4-kilometer portion linking the NLEX to McArthur Highway, and Segment 10 is a 5.65-kilometer road from Mindanao Avenue in Quezon City going to the North Harbor.

MNTC president Rodrigo Franco, meanwhile, said that the firm is seeking to raise P10 billion after getting the Toll Regulatory Board’s (TRB) approval of the Supplemental Toll Operations Agreement.

The Department of Justice (DOJ), however, ruled that pursuing the project as a joint venture was “without factual basis or jurisdiction,” and called for reinstating the project as an unsolicited proposal subject to a Swiss challenge.

Department of Public Works and Highways Secretary Rogelio Singson said that the DOJ opinion prompted government to bring the proposal back to the proponent and treat it as unsolicited proposal open to a Swiss challenge.

source:  Manila Times

DPWH to build P29-B expressway in C Luzon

The Department of Public Works and Highways (DPWH) is planning to build a P29-billion expressway that will connect the Subic-Clark-Tarlac Expressway (Sctex) and Tarlac-Pangasinan-La Union Toll Expressway (Tplex) to Cabanatuan City.

DPWH Undersecretary Rafael Yabut told reporters that the government will bid out the Central Luzon Link Expressway (CLLEx) project before the end of the year.

DPHW said that CLLEx forms an important lateral (east-west) link of high standard highway network within the 200-kilometer radius from Metro Manila.

Phase 1 of the CLLEx will cost P14.93 billion. It involves construction of a 4-lane expressway with a length of 30.7 kilometers that will connect Tarlac and Cabanatuan City. This will have five interchanges, seven bridges with a length of 1,886 meters each, and 38 overpass/underpass constructions.

This portion of the CLLEx diverges from SCTEx at 2.5 kilometers north of Luisita Interchange and traverses Central Luzon in the east-west direction that ends up in Cabanatuan City.

The project will be financed through the official development assistance (ODA) while the Operation and Maintenance (O & M) will be under the Public-Private Partnership (PPP) structure.

DPWH said the project’s objectives are:  To provide fast, safe, comfortable and reliable means of transport in Region III (Central Luzon); to decongest traffic on the Pan-Philippine Highway (Daang Maharlika); to support the socio-economic development of Tarlac and Cabanatuan City, thus contributing to the decongestion in Metro Manila; to form an important lateral (east-west) link for the overall expressway network of Region III; and to provide faster access from Metro Manila to Cabanatuan City, which is the base city for the Pacific Ocean Coastal Area Development.

Phase II, or the Cabanatuan-San Jose, Nueva Ecija development, will cost P14.20 billion. It involves the construction of a 35.7-kilometer 2-lane expressway that will connect Cabanatuan City and San Jose City.

When completed, the expressway will support the development of regional urban centers in Central Luzon and the Pacific Ocean Coastal Areas in order to decrease over-concentration of socio-economic activities in Metro Manila, according to the DPWH.

Yabut said the project’s ODA component will be open for bidding before the end of this year, while the PPP component is expected to be offered for bidding by mid next year.

source:  Manila Times

3rd transport PPP steps towards construction

A P64.9-BILLION project to extend the Light Rail Transit Line 1 (LRT 1) to Cavite has moved closer to the construction stage after the deal was signed yesterday by government and a consortium led by Metro Pacific Investments Corp. (MPIC) and Ayala Corp.

The Light Rail Manila Consortium (LRMC) -- the joint venture company of MPIC, Ayala and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd. that was awarded the deal on Sept. 12 -- yesterday inked the 32-year concession agreement with the Department of Transportation and Communications (DoTC) and Light Rail Transit Authority at EDSA Shangri-La Hotel in Mandaluyong City. LRMC, sole bidder at the June 5 auction, had offered a P9.35-billion premium on top of project cost.

“Twelve months from today, we will be taking over operations and maintenance of LRT 1, and then 48 months after the takeover, LRMC should deliver the expanded LRT 1 system,” Jose Ma. K. Lim, president and chief executive officer of MPIC, told reporters at the sidelines of the event.

Mr. Lim said LRMC will invest P35 billion “over the construction period.”

Ayala President and Chief Operating Officer Fernando Zobel de Ayala said separately that the signing signals the start of the “long and difficult work ahead to extend the 20-year-old rail system.”

Under the deal, LRMC will operate and maintain the existing LRT 1 and extend it for 11.7 kilometers from Baclaran to Bacoor, Cavite. Eight stations will be built along the new route. LRMC tapped French firms Bouygues Travaux Publics and Alstom Transport Pte. Ltd. to build the line, as well as Paris Metro operator RATP Group as “technical partner.”

This is the third public-private partnership (PPP) project DoTC has awarded after the P1.72-billion Automatic Fare Collection System and the P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building. -- CJVDP

source:  Businessworld

8 PPP projects up for NEDA approval

The National Economic and Development Authority (NEDA) board is expected to approve eight more public- private partnership (PPP) projects in the coming weeks, a ranking official said yesterday.

Cosette V. Canilao, PPP Center executive director, said the eight additional projects, which include four airports, a port, an inspection system, prison facilities and the connector road, are up for approval in the next NEDA board meeting.

The PPP projects identified by Canilao are the Davao Sasa Port, the Motor Vehicle Inspection System, the Regional Prison Facilities, the North Luzon Expressway (NLEX) and South Luzon Expressway (SLEX) connector road and four airports.

The P553 billion worth of PPP projects, Canilao said will be unveiled by the government over the next 12 months.

Meanwhile, Canilao said at least five projects under the PPP program will be completed by the end of the Aquino administration and also looking at 17 projects costing P553 billion to be rolled out by June next year.

Among the projects to be rolled out next year include the New Centennial Water Supply Source, operations and maintenance (O&M) of LRT Line 2, Enhanced O&M of Bohol (Panglao) Airport, O&M of Laguindingan Airport, O&M of Puerto Princesa Airport and O&M of Davao Airport.

PPP Center also included the O&M of Bacolod Airport, O&M of Iloilo Airport, Regional Prison Facilities, LRT Line 1 Dasmariñas Extension, North-South Commuter Railway, Manila Bay-Pasig River-Laguna Lake Ferry System and Batangas-Manila Natural Gas Pipeline.

“I don’t think we would be able to complete more than five projects since the rest are big infrastructure projects. But by 2016, the remaining projects would be in the advanced stages of construction,” Canilao said.

To date, only seven out of 50 PPP projects have been successfully award by the government.

Among the awarded PPP projects are the Daang Hari-South Luzon Expressway Link (P2 billion), School Infrastructure Project Phase 1 (P8.86 billion), PSIP Phase 2 (P16.28 billion), Philippine Orthopedic Center modernization (P5.98 billion), Ninoy Aquino International Airport Expressway (P15.52 billion), Automated Fare Collection System (P1.72 billion) and Mactan-Cebu International Airport Expansion (P17.5 billion).

By 2016, the PPP Center is also looking targeting at least 50 projects to be in the pipeline in various stages of the project cycle, at least 15 contracts signed, and at least 10 infrastructure projects handed over to the private sector for O&M.

Canilao said other PPP projects identified during the present administration will be implemented beyond 2016.

The government is banking on the PPP projects to plug the country’s infrastructure gap and create jobs in the process.

NEDA had said the PPP initiative would require up to P739.78 billion in investments through 2016 to boost the economy and the country’s investment rate.

Under its medium-term development plan, the government expects the economy to grow between 7 percent and 8 percent through 2016.

The Aquino administration also aims to raise its investment rate to 18 percent of gross domestic product by the end of its term from 14 percent at present.

source:  Manila Bulletin

Infrastructure spending to top P2T in 2016

The government would increase its public infrastructure spending to at least five percent of gross domestic product (GDP) in 2016 estimated at P2.06 trillion.

Socio-economic Planning Secretary Arsenio Balisacan said the priority programs for the infrastructure sector consist of 952 projects to be supplemented by private sector investments through public-private partnerships (PPPs).

Balisacan stressed that to optimize public-private partnerships and enhance the country’s attractiveness to private sector investors, the government has reviewed, amended and approved policies and legal framework involving private sector participation such as the IRR of the BOT Law (RA 7718) and the joint venture guidelines.

Reforms in the energy sector have also increased private sector participation. In July 2012, the Energy Regulatory Commission (ERC) approved the feed-in-tariff (FiT) rates to encourage renewable energy developers to invest at the initial stage and hasten deployment.

To improve competitiveness and geographic connectivity, the pocket open skies policy was issued in 2011, allowing foreign carriers to operate unilateral and unlimited traffic rights to airports other than the Ninoy Aquino International Airport (NAIA), said Balisacan.

He noted that the Common Carriers Tax (CCT) aims to enhance the country’s competitiveness in international travel by encouraging international air carriers to include the Philippines in their primary routes.

“On top of these policies, the government is pursuing the synchronization of planning, programming and budgeting to ensure that the programs and projects are aligned with the country’s developmental goals and outcomes,” said Balisacan.

“Sustaining the economy’s high-growth trajectory requires continued investment in infrastructure to unleash the potentials of many areas throughout the country.”

Balisacan said the government has encouraged to participate in the construction and implementation of various programs and projects that have been identified in a number of infrastructure-related roadmaps and master plans.

Some of the priority transport infrastructure programs include the Transport Infrastructure Development Roadmap for Metro Manila and its surrounding areas, the Logistics Infrastructure Roadmap for Mindanao, to improve logistics infrastructure for cost-effective linking of Mindanao’s agriculture and fishery production centers the DPWH and Department of Tourism (DOT) Convergence Plan, to provide road access to designated priority tourism destinations under the National Tourism Development Plan (NTDP).

Other approved infrastructure master plans include the Flood Management Master Plan for Metro Manila and Surrounding Areas and the E-Government Master Plan (EGMP).

In the energy sector, the 2013-2017 Household Electrification Development Plan (HEDP) issued by the Department of Energy (DOE) sets the plans and strategies to attain 86.2-percent household electrification by 2016 and 90-percent by 2017, while the Philippine Energy Plan 2012-2030 targets 100-percent electrification of villages by 2015.

To promote energy conservation and energy efficient technologies, the Department of Energy (DOE) is implementing various activities under the National Energy Efficiency and Conservation Program (NEECP), while the National Renewable Energy Program (NREP) aims to develop specific technologies and help the country triple its renewable energy capacity by 2030. (EHL)

 source:  Manila Bulletin