Economists push for PPP, investment-led growth plan

MANILA, Philippines — The government should pursue more public-private partnerships (PPPs) in the rollout of infrastructure projects that are crucial in driving an investment-led growth strategy, economic experts said.

In a recent business roundtable, Stratbase ADR Institute president Dindo Manhit said mutual collaboration between the public and private sectors is vital to withstand global economic shocks and help rebuild the Philippines into a more resilient nation.

“To attain an investment-led growth, the government must create a business environment that enables growth and innovation through market-friendly public policies, transparency and good governance,” he said.

He said the manufacturing sector that specifically caters to the domestic market should be reinvigorated.

“Foremost, it will significantly narrow our trade deficit, because we would lessen the need to import goods for consumption here in the country. Second, it would create jobs and other opportunities for the population, providing them income security, alleviating poverty, and revitalizing consumer spending,” Manhit said.

In the same forum, former socioeconomic planning secretary Ernesto Pernia pointed out that investments in physical infrastructure are more feasible via the PPP route.

“Physical infrastructure is a very costly undertaking but the advantage in investment in physical infrastructure is more feasible via PPPs. It is crucial, though, that the conditions and guarantees imposed by the public sector on private sector partners are fair and sufficiently attractive for them to recover their investment cost and with reasonable returns,” he said.

Aside from physical infrastructures, Pernia urged the government to also invest heavily on human capital and social infrastructure such as schools and health centers to ensure economic progress.

“The vitality of the economy is only as good as the country’s health and education systems… The budget for physical infrastructure is P1.2 trillion. I would say that half of that should go to the human capital and social infrastructure because the other half of the budget for physical infrastructure can come from the private sector via the public-private partnerships,” Pernia said.

Ateneo de Manila University Economics Department chairman Alvin Ang also emphasized the importance of PPPs and investing in human and social infrastructure.

“The power to push investment is really dependent a lot on the government and the private sector working together to bring in more investment opportunities in the country,” Ang said.

“We need to show consistency in how the previous PPPs were done. For example: the Skyway, the LRT and the extensions… We have the models. We can show it. And we can ask out investors to help improve our education and agricultural sectors as well,” he added.