The private sector component of the P100-billion infrastructure fund is nearly complete, with the first project expected to start within the first quarter, the Philippine Chamber of Commerce and Industry (PCCI) said.
“We are just waiting for the government to give us some kind of sovereign guarantee but we are ready to come in,” Ambassador Donald Dee, PCCI chairman and one of the main proponents of the fund said in an interview.
According to Dee, several domestic firms have already expressed interest in helping the government pump prime the economy by participating in the infrastructure fund.
“We want to create a depository account wherein potential investors can just deposit their money there. Of course guarantees must be put in place,” Dee explained.
The private sector is asking the government to issue bonds in exchange for the P50 billion private sector participation.
However, Trade Secretary Peter B. Favila expressed his dismay over the issuance of ROP (Republic of the Philippines) bonds in exchange for the investment.
Favila explained that the private sector would like the government to issue bonds before they disburse money. Favila said this is tantamount to the government borrowing money from the private sector in order to enact the projects.
“If this is the case then we can do it on our own,” Favila said in Filipino.
Late last year, the private sector presented to Mrs. Arroyo a P100-billion infrastructure fund that would help increase spending in the country on order to combat the effects of the financial crisis.
The government will shoulder half while the private sector will cover the rest. However, Favila said until now the private sector still has not produced their part of the infrastructure fund.
Dee has already identified the P18-billion North Luzon Expressway project and the $200-million airport in Clark Freeport zone are the first two projects to be funded by the fund.
“We are currently validating two projects and if everything goes well we can start this,” Dee said.
According to Dee, the private and public sector fund will bankroll part of the two projects in an attempt to stimulate economic activity in the country.
“We think these are important projects and we are already talking to NEDA (National Economic Development Authority) about it,” Dee explained.
The road project is expected to decongest the heavy Metro Manila traffic while the Clark Freeport Zone is looking at building a new terminal for its airport which is expected to be operational by 2010. It will be constructed beside the existing airport.
Dee said other projects are expected to be approved within the year. He explained that the proponents of the fund, in coordination with NEDA will evaluate which infrastructure projects to fund.
He said the P100 billion will be released pro rata, depending on the result of each project evaluation.