MANILA, Philippines - The government wants more time to study big infrastructure deals it had planned to bid out to investors this year to ensure success of the projects, even as it pursues more fiscal sustainability measures, the Finance secretary said on Friday.
The government had earlier planned to start auctioning off 10 priority infrastructure projects in March under a private-public partnership program (PPP), the centerpiece of the Aquino government's development goals.
"The important thing is to make this right, not rush it," Finance Secretary Cesar Purisima said in an interview on ANC television. "Our objective is to make this sustainable."
"To make this right, we need to do our homework. We need to do feasibility studies," Purisima said. "Because if you bid this out and you do not understand what it is you are bidding out, investors will take advantage of you."
The government had deferred the first auction set in July for a P14 billion contract to operate and maintain Metro Manila's two railway systems -- Metro Rail Transit 3 and Light Rail Transit 1. Newly appointed Transportation and Communications Secretary Mar Roxas said he ordered a full study on whether the operations need to be bid out at all.
The government launched instead the bid prequalification process for the Daang Hari-South Luzon Expressway toll road, linking Cavite province to Manila. Bidding for the project, now the government's first PPP, is targeted by December.
Trade Undersecretary Cristino Panlilio also said that the government may just bid out five PPP projects this year, half of its target, as feasibility studies were taking longer than expected.
Meanwhile, Purisima said the government was pursuing fiscal sustainability by narrowing its budget deficit and managing its debts.
"That's President Aquino's goal... to fix the foundation of the economy, not just to hasten growth, but to make it sustainable. We have to improve revenue and spend wisely."
He said they expect savings of about P30 billion from interest costs this year, money which may be used to fund a conditional cash transfer for the poor.
The Philippines has just concluded a record P323-billion local debt swap aimed at stretching its debt maturities and is now planning another swap involving its foreign debts.
The government wants to keep the budget deficit at P300 billion, or 3.2% of gross domestic product (GDP), this year after a shortfall of P314 billion, or 3.7% of GDP in 2010.
Purisima also downplayed worries on the strengthening peso, which is hurting incomes of millions of Filipinos working overseas and the country's export competitiveness.
"The market should determine the exchange rate of the peso," he said. "The important thing is we are within the same band as our peer countries," he said.
The Philippine currency extended its gains to hit a three-year high of 42.41 against the dollar in morning trade on Friday, with demand from leveraged funds and interbank speculators. It has gained about 1.2% this week. - With Reuters