BSP extends period of addt'l loan limit for PPP-engaged firms


Posted at Dec 20 2012 03:43 PM | Updated as of Dec 20 2012 11:43 PM

MANILA, Philippines - The Bangko Sentral ng Pilipinas has extended an amendment for banks' single borrower's limit (SBL) as bulk of government's public-private partnership (PPP) projects remain in the pipeline.

The central bank since 2004 has implemented an SBL of 25% of a bank's capital, in order to spread risk by making sure loans are not concentrated on only a few borrowers.

But in 2010, the BSP issued a circular allowing companies participating in PPP projects to have an additional 25% on top of their SBL. The measure was announced shortly after the Aquino administration launched its PPP program and was supposed to be in place until December 2013.

"The Monetary Board decided to extend for another three years the original three-year period allowing a separate single borrower's loan limit of 25% ... granted for undertaking infrastructure and/or development projects under the PPP program of the government," the BSP said in a statement Thursday.

The extension came after only two projects have been auctioned off and other five rolled out since the PPP program's launch in late 2010.

"[D]ue to the long and complex process involved in the awarding of PPP projects, very few projects were awarded subsequent to said BSP issuance," the central bank said, pointing out "several PPP projects are still in the pipeline."

The extension means that the additional SBL of 25% for firms engaging in PPP projects will be in place until Dec. 28, 2016.

"The extension of another three years for the separate 25% SBL for PPP infrastructure and/or development projects is expected to encourage the financial sector's participation in the PPP Program of the government, particularly with respect to the projects that are still in the pipeline," BSP said.

Only two PPP projects have been bid out since late 2010: the DaangHari-SLEX Link Road and the PPP for School Infrastructure Project Phase I.

Five other, meanwhile, have been rolled out this year: NAIA Expressway Project; LRT-1 Cavite Extension operations and maintenance; the Modernization of the Philippine Orthopedic Center; the Rehabilitation, and O&M of Angat Hydro Electric Power Plant; and the Automatic Fare Collection System.

PPP Center Executive Director Cosette V. Canilao earlier this week said the government may roll out two more projects before year-end, the Mactan -Cebu International Airport Passenger Terminal Building and the School Infrastructure Project Phase II.