The Department of Finance (DOF) on Monday invited investment banks in Japan to explore opportunities in the country’s hybrid Private-Public Partnership (PPP) Program in line with the Duterte administration’s infrastructure buildup.
Finance Secretary Carlos G. Dominguez III said investments banks, such as the Nomura Group, may explore opportunities in the Philippines’s planned P8.4-trillion infrastructure buildup by taking part in the country’s new hybrid PPP Program.
In a meeting with Toshiyasu Iiyama, senior managing director of Nomura Holdings Inc., and other Japanese executives at the sidelines of the Asian Development Bank Governors meeting in Yokohama, Japan, Dominguez said the Duterte administration is adopting the hybrid PPP formula because it wants to get things done quickly in rolling out its massive infrastructure program.
“The [traditional] PPP method takes too long to negotiate the terms of the agreement. We will initiate the project and decide at a certain point when to make it a PPP, perhaps toward the middle or toward the end. Investment banks, like Nomura, which are active in the capital markets, may be able to help,” Dominguez said.
Dominguez added the Philippine government intends to kick off its infrastructure buildup by developing the Clark International Airport in Pampanga, and possibly the Davao airport.
Two of the largest projects under the Philippines’s P8.4-trillion “Build, Build, Build” program include the Manila-Clark Railway and the Mega Manila Subway, which will be funded with assistance from Japan.
“Accelerating the implementation of the projects by having the government start them will be the strategy,” he added.
Under the hybrid PPP formula, the government selects, finances and builds big-ticket projects through competitive public bidding and, upon completion, auctions off their operation and maintenance to the private sector.
Nomura officials informed Dominguez of the bank’s new infrastructure team setup in Singapore, which will be tasked to contribute to the region’s infrastructure projects.
Nomura’s strategies to tap the capital markets for fund-raising and consolidating assets will ease the burden on banks and enable investors to meet the demands for funds for infrastructure projects, according to the DOF.
BDO Nomura Securities Inc., which is Nomura’s joint-venture deal in the Philippines with BDO Unibank, is seen contributing to the expansion of the Philippine stock market.
Earlier, Dominguez said two projects implemented using the hybrid PPP scheme were started in less than nine months since President Duterte took over last year, a significant improvement from the usual 29 months that it takes for a traditional PPP project to get going.
These two projects are the Plaridel Bypass Road, which will link the North Luzon Expressway in Balagtas, Bulacan, with the Maharlika Highway in San Rafael, Bulacan; and the Central Luzon Link Expressway, which will connect Cabanatuan City in Nueva Ecija to Tarlac, according to Public Works Secretary Mark A. Villar.