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Government still lukewarm at PPP
MANILA, Philippines – The country's economic managers remain reluctant to pursue larger projects thanks to the public-private partnership (PPP) even as the transition from the mode of financing of official development assistance (ODA) to other modes is envisaged. In a briefing yesterday, Finance Secretary Carlos Dominguez III said that if the government withdrew some projects from ODA funding because of the lengthy approval process, it would still prefer to build the physical infrastructure. using public funds and transferring operations and maintenance (O & M) to the private sector.
He said, however, that the government would continue to receive unsolicited proposals that have already been advanced.
Secretary of Socio-Economic Planning Ernesto Pernia said last week to consider possible transfers of ODA funding to other project implementations – such as PPPs and general credits – if the granting of ODA loans takes too much time. The processing of ODA loans usually takes months, if not years, because of the variety of bureaucratic processes in donor countries.
Pernia said the government is ready to change the game. Dominguez said the government remains wary of the complications that usually accompany PPP projects such as the longstanding requirement for negotiations and subsequent prosecutions in the past between private
"The PPP is also very We have done a study on the duration of the PPP, from the submission of the project at the beginning of the project is also 30 months.The negotiation time required by our laws is very time consuming.With PPP, we also find that the actors of the private sector are mutually pursuing, "he said.
He noted that some projects originally established as PPPs moved to the construction phase more quickly when funding was changed. The CFO also said that the time was right for the government to build a solid base of public assets using its own resources when it enjoys a good credit rating and a good reputation. access to favorable financing.
"While we are doing all these projects ourselves, the government is building an asset base that is going to be very important, so if future governments need money, they can do it. I think the time to build our own government assets is now, "he said.
Economic managers also disapprove of the minimum income guarantee system in which private developers can demand that the government guarantee their income deficits in PPP projects. ] "The government, although it does not guarantee the loan itself, guarantees the income.If the income is so lower, the government says we are going to supplement it.It's like a loan guarantee but in another form, banks like that because they (project promoters) do not take the risk, I think if you're in the private sector, you should take the risk of making a profit. should not ask the government to take the risk of you.That's why we are also considering another system to do it, "said Dominguez
.While funding via the path of the ODA economic managers still view it as an essential component of the Build Build Build funding, which is largely aimed at reversing decades of neglect in the country's public infrastructure
largely because concessional financing can still be extended to a developing country like the Philippines and in the longer term for loans. rates lower than those of the private sector. So, if it's a PPP, why charge the user a higher rate because of the cost of financing when we can afford the lower rate, "said Dominguez.
He said that the economic team is having more frequent meetings with their Chinese and Japanese counterparts. "We are just trying to go as fast as we can," said Dominguez
Pernia also urged the public to be more patient that government projects still have to stand in the way of a full project cycle after approval by the NEDA board of directors.The project cycle of the government is divided into six processes: project identification, evaluation and approval process (ICC, DBCC, NEDA Board authorization), budgeting and financing, implementation (detailed engineering and design, procurement and construction), monitoring and evaluation.
" That's why the projects are implemented but we have not seen them in the field, projects become more visible during implementation when they actually start and construction begins. " s, id) {
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