BSP showcases Malampaya PPP to S&P

MANILA, Philippines - The Malampaya deep water gas-to-power project’s example of public-private partnership success was showcased by the Bangko Sentral ng Pilipinas (BSP) Investor Relations Office to international credit rating agency Standard and Poor’s (S&P) during its annual dialogue with the Philippine government held last March.

The Malampaya gas project is the outcome of strong public-private partnership, spearheaded by the Department of Energy, and developed and operated by Shell Philippines Exploration, B.V. (SPEX) on behalf of its joint venture partners. Malampaya facilities include the natural gas power plants First Gen and Ilijan, and Malampaya phases 2 and 3 (MP2 and 3).

SPEX, the upstream operating company of Shell in the Philippines, conducted a briefing on the Malampaya gas project for S&P associate director Agost Benard and director Takahira Ogawa, together with BSP investor relations office’s acting executive director Editha L. Martin and acting bank officer Rica Amador.

SPEX managing director Sebastian Quiniones and SPEX finance manager Jeng Pascual underscored Malampaya’s contribution not just toward environmental management, but to sustained national growth and development. Since it started commercial operations in 2001, the Malampaya gas project has contributed billions of pesos worth of government revenue share.

The Malampaya gas project now also provides 30 percent of the country’s energy needs with cleaner-burning natural gas. More than supporting energy security, the project also enables the transfer of technology and expertise that enhances Filipino capability to meet the stringent standards of international oil and gas industries.

Two months after the briefing and visiting the Malampaya gas platform, S&P raised the Philippine foreign currency denominated and peso debts a notch above the coveted credit rating of investment grade that was acquired by the country a year ago.

The credit rating agency gave the Philippines a long-term sovereign credit rating of “BBB” from “BBB-”, and upgraded its short-term rating to “A-2” from “A-3”.

S&P noted that the Philippine outlook is stable and this is not likely to change in the next 12 months.

S&P’s Benard remarked, “We raised the ratings because we now believe that the ongoing reforms to address shortcomings in structural, administrative, institutional, and governance areas will endure beyond the current administration.”

S&P skipped the assignment of a “positive” outlook on the country and went ahead with raising the country’s credit ratings.

Bangko Sentral Governor Amando M. Tetangco Jr. welcomed the immediate upgrades. “This action is further affirmation of the country’s strong macroeconomic fundamentals,” he said.