Upcoming PPP Code, trends reshaping Philippine infrastructure

With the imminent enactment of the proposed Public Private Partnership (PPP) Code, and major trends and developments happening, the Philippine Infrastructure Summit 2023 held greater significance as public and private sector leaders tackled how these are reshaping the Philippine infrastructure landscape. The Management Association of the Philippines (MAP), the Public-Private Partnership (PPP) Center of the Philippines and PwC Philippines co-organized the Summit held on 22 November 2023 in Pasay City.

In his opening remarks, PwC Philippines Chairman and Senior Partner Roderick Danao cited the crucial role of infrastructure development in significantly improving the lives of Filipinos. For her part, Atty. Benedicta "Dick" Du-Baladad, MAP President, emphasized the importance of transforming the infrastructure landscape of the Philippines for the better.

Sen. JV Ejercito, Deputy Majority Floor Leader and the PPP bill’s Principal Sponsor and Author in the Senate, presented the comprehensive master plan for infrastructure development, shedding light on how infrastructure drives foreign direct investments and economic growth. These proposed projects have the potential to transform their respective regions into major economic hubs, making public transportation more efficient and accessible, fostering job creation and greater economic development.

In navigating the complexities of PPPs, PPP Act co-author and House Committee on Ways and Means Chairman Rep. Joey Sarte Salceda said, “With a focus on innovative financing models and a maximum rate of return as a bidding parameter, the PPP Code signals a progressive leap toward a future of impactful infrastructure development. I urge all stakeholders, especially in the private sector, to embrace this vision and contribute to shaping a dynamic PPP ecosystem.”

Messages from key government agencies were delivered by USec. Catherine Fong (Department of Finance Undersecretary for Privatization and Corporate Affairs Group), USec. Maria Catalina E. Cabral (Department of Public Works and Highways Undersecretary for Planning and Public-Private Partnership Services) and Sec. Ernesto V. Perez, CPA (Anti-Red Tape Authority (ARTA) Director General).

PPP Center Executive Director Ma. Cynthia C. Hernandez discussed the proposed PPP Code’s significant reforms, which will further strengthen the PPP Program by consolidating all legal frameworks and creating a unified system that will further enhance private sector participation. Three panelists discussed with her their insights on the upcoming law: Jeffrey I. Manalo (Deputy Executive Director V, PPP Center of the Philippines), Usec. Gerald Divinagracia (Deputy Director General for Operations, Anti-Red Tape Authority), and Atty. Lianne Ivy P. Medina (Mergers and Acquisitions Director, Philippine Competition Commission). Moderating the discussion was Atty. Jose Patrick S. Rosales (Infrastructure and Tax Director, PwC Philippines).

Aboitiz InfraCapital President and CEO Cosette V. Canilao underscored the need for reliable and efficient e-government services that can enable data-driven government policymaking. She presented case studies of high performing countries that have strategic initiatives to promote emerging technology, such as AI, in their services. Four panelists continued the dialogue on the state of digital infrastructure: Usec. David Almirol (Undersecretary for e-Government, Department of Information and Communications Technology or DICT), Usec. Jeffrey Dy (Undersecretary for Cybersecurity, DICT), Benjamin Azada (EVP and Chief Strategy Officer, Converge ICT Solutions, Inc.) and Henry Aguda (President and CEO, UnionDigital Bank). PwC Philippines Assurance Managing Partner Aldie P. Garcia moderated the session.
 

Baguio City Mayor Benjamin Magalong presented his vision to transform Baguio into a Smart City by 2027 through a seven-point agenda that spans environment, land use and energy; climate and disaster resilience; urban regeneration; youth empowerment; economic recovery and development; Smart City management; and good governance. He and four panelists talked about the trends and nuances on PPP in local government: John Dominic Zafe (Director IV, PPP Center), Ramon “Dondi'' Alikpala (CEO, FutureWater Asia), Juan Manuel “Jay” Gatmaitan (Head of Economic Investment and Promotions Office, Quezon City Local Economic Investment Office) and Atty. Brando Cabalsi (Partner, Cabrera & Company/PwC Philippines). Eleazar Ricote (Deputy Executive Director, PPP Center) was the moderator.

PwC China/Hong Kong Partner for Capital Projects and Infrastructure Simon Booker talked about the growing infrastructure investment gap in Asia, highlighting the disparity between estimated infrastructure needs and actual infrastructure delivery. He then presented emerging financing models, such as blended finance, green bonds, investment funds and infrastructure Real Estate Investment Trusts (REITs), that could help to address financial challenges in infrastructure development. He then joined panelists Eduardo V. Francisco (President, BDO Capital & Investment Corporation), Roel Refran (EVP and Chief Operating Officer, Philippine Stock Exchange), Ida Tiongson (President and CEO, Opal Portfolio Investments (SPV-AMC) Inc.) and Ramon H. Diaz (Executive Director and CFO, Megawide Construction Corporation). Mary Jade T. Roxas-Divinagracia, CFA®, CVA, Deals and Corporate Finance Managing Partner at PwC Philippines, moderated the discussion.

A special panel of government and business leaders discussed sustainability in infrastructure: Dr. Gerardo “Gap” D. Legaspi (Director, Philippine General Hospital), Catherine Lipana-Gomez (Deals and Corporate Finance and ESG Partner, PwC Philippines), Jose P. Madara (President and CEO, METPower Venture Partners Holdings Inc.) and Sarah Bergado (Sustainability Head, Manila Water Company). They talked about the investments required to build and support sustainable projects and stressed the importance of viewing these investments as long-term returns rather than costs. These projects bring many benefits, including the cost reductions in the use of renewable power and low carbon equipment and prioritizing the well-being of employees. Presiding over the session was Atty. Alexander B. Cabrera (Chairman Emeritus and ESG Leader, PwC Philippines and Vice President, MAP).
Nurturing the partnership between private and public sectors will help reshape, or even transform, Philippine infrastructure that has lagged behind its neighbors for decades. But for the country to realize its infrastructure goals, our leaders need to prioritize good governance, transparency and consistency in project delivery.