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MANILA – The economic contribution of the Aquino administration’s public-private partnership projects will likely be felt later this year or early next year, according to DBS.
“The PPP projects continue to face delays as the administration sought to reduce the incidence of corruption. Delays in the bidding out of projects mean the positive impact on the construction industry may only materialize in late 2012 or 2013,” DBS said in a research note.
Of the 22 PPP projects the government lined up as early as 2010, only one – the Daang Hari-SLEX Link – has been bid out, with the Ayala group bagging the project. Two other projects – the School Infrastructure Project and LRT Line 1 Cavite Extension Project – are still in the prequalification stage.
The government earlier said it would jumpstart its PPP program to help cushion the Philippines from a global economic slowdown brought about by the euro zone debt crisis and the slow recovery of the US.
Philippine gross domestic product grew a faster-than-expected 6.4 percent in the first quarter of this year on the back of steady consumer spending and strong exports.
Gross fixed capital formation however lagged, rising 2.8 percent year-on-year, with construction hardly growing at 0.3 percent.
“Notably, private sector construction was down by 9.9 percent and the total construction figure would have been negative if not for a 62 percent surge in public construction,” DBS said.
The Singaporean bank forecast Philippine GDP to grow 5.3 percent this year, picking up from 3.9 percent last year. DBS' forecast is near the low end of the Philippine government's five to six percent target range.
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