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MANILA - The Aquino administration must make sure that at least one big public-private partnership project gets past the bidding stage this year so the positive sentiment towards the Philippines would not slip away, ING Bank N.V. Manila said.
Jose Mario I. Cuyegkeng, ING Bank Manila senior economist, said the market and foreign investors have been waiting for the PPP program to take off "for far too long."
The government must make the effort of pushing at least one major infrastructure project to bear fruit, he said.
"That's the problem. If PPPs don't push through because people had been waiting for two years, then the sentiments created, which is positive, would, at worst, dissipate," he said.
The economist said the positive sentiment on the Philippines would not completely reverse given other macroeconomic fundamentals such as benign inflation, strong gross domestic product growth buoyed by household consumption, and a sound financial system.
However, the country is confronted by the possibility of a hard landing for China, which could drag down the Philippines' exports sector further, as well as the worsening crisis in Europe and slow growth in the US.
"For the economy to grow at a higher trend level, those things have to be put in place," Cuyegkeng said, referring to PPP.
One big-ticket PPP project, like the LRT 1 South Extension, should proceed to implementation stage before the year ends "to keep the momentum going," he said, adding that this should be followed by the accelerated roll out of other PPP projects to make the program credible to investors.
"Market would be very happy with at least one big PPP. It has to be a big one," Cuyegkeng said.
Since the Aquino administration has launched this program two years ago, the government has bid out only one project, which is the Daang Hari-SLEX Connector Highway, out of the 21 projects in the pipeline.
As of June 27, only the P59.2 billion LRT Line 1 South Extension and the P10.04 billion PPP for School Infrastructure have progressed to the bidding stage.
Many foreign investors are keen on participating in the PPP but its slow progress left many bewildered.
Filomeno Sta. Ana, Action for Economic Reforms executive director, said the problem with the government right now is that there is no cohesion inside the Aquino administration.
Sta. Ana pointed out policy differences inside the President’s circle so a lot of programs are stalled.
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