PH economic team makes pitch in Germany; foreign investment caps flagged as key roadblock

Warren de Guzman, ABS-CBN News

Posted at Jan 23 2023 10:17 PM

Finance Secretary Benjamin Diokno, Budget Secretary Amenah Pangandaman, National Economic and Development Authority Secretary Arsenio Balisacan, and Central Bank Governor Felipe Medalla kicked off the first of two Philippine Economic Briefings scheduled this week with a presentation in Frankfurt, Germany.

Secretary Arsenio Balisacan discussed the projects NEDA has in the pipeline. 

"We have started compiling all of these potential infrastructure projects. Within this quarter we will be releasing what we are calling the public investment program for 2023-2028 as well as the 3 year rolling infrastructure program for 2024-2026. The latter is used to help inform the budgeting process for our key priority projects," he said.

"As of today we have the various agencies of government have identified for this public investment program for the medium term, over 3,600 projects that amounts to something like $372B,” Balisacan added. 

"Out of these 3,600 projects we are looking at, we are seeing 180 plus of these projects have a cost exceeding, at or exceeding $45M which means these projects would have to go through the approval process of our government.” 

"Out of these 3,600 projects we are looking at a short term list of what we call the infrastructure flagship projects that we would want to see implemented, completed, or at least started during the administration, up to 2028. These projects are chosen for their responsiveness to the goals of PDP, that they are part of the master plans of our key agencies, and that these are responsive, or have national significance. These now total to 206 projects worth $159B and they are in various sectors like, 136 of those are in physical connectivity, 9 are on digital connectivity, 42 on water resources, 8 on health, 2 on power and energy, and others about 9 projects," he explained. 

"As of the end of last month we have identified or in the pipeline for PPP are already 87 projects. These amount to or have an expected cost of $54B. The projects that I mentioned earlier, the 206 would go into what we call the Marcos Administration Flagship Projects will likely be, or many of these will also be in the form of PPP especially if the partnership is between government and investors, both local and domestic. With those projects we will see a major transformation of the physical landscape of the country in the next 6 years. Again there are a lot of opportunities for the business community including those from outside the Philippines," Balisacan also said.

One attendee noted that he is actually already helping to build one infrastructure project, and is very much interested in working on more, and investing more in the Philippines. 

However, he has a problem. 

“At the moment we own 40 percent of the company. We are working on your Manila Metro project and we want to work on the North-South commuter rail. Our problem at the moment is our investments are a little bit, let’s say 'obstacled', a little bit blocked, due to this construction license program that you can only own 40% of construction companies. We would gladly invest more, but at the moment we can’t. Are there any ideas how to change that and if, when can that happen?" he said.

Another attendee, in construction and manufacturing, said there is indeed a problem for foreign builders. 

"I’m based in the Philippines, chairman of the European chamber of commerce central Luzon, founder and owner of Flood Control Asia Corporation, based in Clark. We are manufacturing, we are also in construction, so I understand very well the question before," he said.

Balisacan, who is the former chairman of the Philippine Competition Commission, said efforts are underway to address the matter. 

"We are working on that, in fact at the PCC it has launched a case in the courts challenging that regulation that says foreign, big companies are less preferred than domestic companies. It said no, the playing field should be the same for domestic and foreign companies. Let me get back to you on that, because that was a live case when I was the chairperson of the country’s antitrust agency not so long ago," he said.