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A FOREIGN institution will put up a fund in the Philippines to support investors in infrastructure, a Cabinet official said on Thursday.
“A private financial institution is about to announce a Philippine-focused infrastructure fund. I have met with them [sic] and assured them of my support,” Finance Secretary Cesar V. Purisima told reporters at the sidelines of a Senate budget hearing.
He declined to name the group involved, saying, “I don’t want to steal their thunder.”
The investment fund will offer peso-denominated financing, Mr. Purisima said.
While he also declined to specify the size of the fund, he assured it would be “very substantial.”
The Department of Finance has long been encouraging financial institutions to set up funds here to support the government’s planned massive infrastructure buildup.
“Finally, there is one,” Mr. Purisima said.
“Those who are investing in our PPP (public-private partnership) or infrastructure projects can seek equity funding, senior debt, junior debt, quasi-debt or any form of instrument,” he explained.
The said investment fund will be separate from the credit line the government is also looking to establish, although that project is still under study, the Finance chief added.
Government financial institutions — Development Bank of the Philippines, Land Bank of the Philippines, Social Security System and Government Service Insurance System — had earlier pledged to contribute P250 billion each to the infrastructure fund the government has been planning in support of its PPP program.
The government still hopes to launch five PPP deals this year, even as a fresh round of reviews delayed 10 big-ticket infrastructure deals initially slated for rollout.
So far, only the P1.956-billion Daang Hari-South Luzon Expressway (SLEx) link deal has advanced ahead of the rest, with 18 firms purchasing pre-qualification documents.
The project is scheduled to be auctioned off on Dec. 28.
An earlier PPP project, the P15-billion operation and maintenance contract for the Light Rail Transit Line 1 and the Metro Rail Transit Line 3, was opened to investors in March.
However, it was shelved for review after a change in leadership at the Department of Transportation and Communications, with later reports saying the contract to be sold may no longer be for both operation and maintenance.
The Department of Health’s Vaccine Self-Sufficiency Project, which aims to localize production of key vaccines, was also put on the auction block last week.
However, this was not part of the 10 deals originally identified by the government for this year.
The PPP Center Web site has also taken down its list of Projects for 2011 Rollout and replaced it with five “Live Projects” instead:
• construction of 10,000 classrooms, furniture and sanitation facilities for schools in Region I (Ilocos Region), III (Central Luzon) and IV-A (Cavite-Laguna-Batangas-Rizal-Quezon, or Calabarzon);
• Vaccine Self-Sufficiency Project;
• Daang Hari-SLEx link;
• North Luzon Expressway-SLEx connector; and
• Puerto Princesa airport development.
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By: Diane Claire J. Jiao
Source: Business World, Sept. 15, 2011
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