ASEAN KEY DESTINATIONS
Stopgap funding for Philippine infrastructure
Finance Undersecretary Rosalia de Leon told reporters that an executive order (EO) authorizing the NDC to issue bonds would be issued, the proceeds of which would jumpstart the government's public-private partnership (PPP) program.
Government financial institutions (GFIs), namely the Land Bank of the Philippines, Development Bank of the Philippines (DBP), Government Service Insurance System (GSIS) and Social Security System (SSS), would be subscribing to the NDC bonds, representing their P200-billion commitment to the PPP initiative.
"We would be issuing an EO to implement the NDC bonds. The subscription of these bonds would be limited to the four-Land Bank, DBP, GSIS and SSS," de Leon said.
The official said the P200-billion bond issuance would be undertaken while the government works out long-term financial options for the PPP.
The NDC bond proceeds would supplement the P12.5-billion budget the Aquino administration proposed to Congress under next year's General Appropriations Act.
In providing the seed money, the GFIs aim to fast-track infrastructure development, promote more partnerships, and finance qualified projects through long-term funding in local currency.
Proceeds of the bond issuance would finance land acquisition for easement costs and other pre-development needs as the government's counterpart initiative to attract investors.
"The NDC bonds would stand for now while we are still working out a long-term solution. We are looking at the creation of a fund that would work for the long term, patterned after the Indian and Indonesian infrastructure fund models," de Leon said.
The Indonesian and Indian infrastructure financing models involved the establishment of a separate entity tasked with long-term financing.
PT Indonesia Infrastructure Finance was put up to provide long-term rupiah financing and advisory services to private infrastructure projects.
The India Infrastructure Finance Co. Ltd. was also an institution for financing and development of infrastructure projects in that country.
De Leon said the Philippine government must first put in place a long-term infrastructure-financing program before it can tap other sources of financing for the PPP scheme.
"We are in talks with the donor community over the possibility of them not only extending concessional loans to proponents of PPP projects but for them to also invest directly on these projects," she said.
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