June 2nd, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that he will push for a stronger, more attractive framework for public-private partnerships (PPPs) in the 19th Congress, saying that such agreements “will be crucial in building modern and efficient public services during a time of tough fiscal conditions.”
“We have ongoing fiscal constraints, but we also have ongoing public needs. Infrastructure and social services will always be good, and necessary investments. So, sourcing from outside the public sector will be very crucial,” Salceda said, in comments after a meeting with incoming Public Works and Highways Secretary Manuel Bonoan.
“We talked about how to move forward with PPPs, especially given the tight room for funding major projects. Sec. Manny appears to be quite bullish about Philippine infrastructure development over the next six years. I think PPPs stand a very strong chance of playing a major role again in this new administration. Sec. Manny has been with both the public and private sectors for a long time. And PBBM has, in many interviews, made very cogent observations on the need for more flexible PPPs,” Salceda added.
Salceda, who is the principal author of the proposed PPP Reform Law in Congress, and who chaired the drafting committee of the bill, says that he hopes PPP reforms also have a stronger chance of passing this incoming 19th Congress.
“The private sector, especially the large conglomerates, are awash with cash for PPPs. San Miguel has 301.7 billion, Aboitiz Equity Ventures has 107.5 billion. Ayala Corporation has 99.6 billion. SMIC has 93.9 billion. JG Summit has 292.6 billion. LT Group has P390.1 billion.”
“That’s a total of 1.285 trillion in cash for just these conglomerates alone. For perspective, Build, Build, Build received just a 1.180 trillion budget for 2022. So, the private sector can fund infrastructure development many times over, if we opened participation to even more companies,” Salceda added.
Salceda also says that he is in talks with the incoming DPWH secretary on how to modernize the infrastructure and transport sector.
“I discussed with Secretary Bonoan today how I hope to help his department with sourcing the necessary fiscal space for infrastructure. It is absolutely crucial that we maintain infrastructure as a spending priority.”
“In fact, BBM’s first budget, I think, has to revolve around three key priorities or principles. First, we must maintain productive spending and keep it higher than the deficit as a share of GDP. Second, we must ensure that we contain personnel spending growth, which has ballooned to around a third of the budget by now. Third, our public spending must have higher economic multiplier effects, and should be useful for longer periods,” Salceda said.
“But, we really need to expand fiscal space, either by collecting existing taxes better, or by imposing new taxes. Because PPPs do entail the need for some fiscal space in the future. Basically, a PPP is advancing public welfare but deferring public costs. But the costs will come,” Salceda added.
Salceda says he briefed Bonoan about both his thoughts on a “vertebral infrastructure system” to link major infrastructure projects as one national intermodal transport system, reforms in funding and preserving the infrastructure program, and making public works more economically beneficial.
Bonoan was Acting DPWH chief when Salceda was Presidential Chief of Staff during the Arroyo administration.