GFIs commit P200B to jumpstart PPP initiative

(Updated 3:27 p.m.) Government financial institutions (GFIs) have committed P200 billion to the Aquino administration’s public-private partnership initiatives, Development Bank of the Philippines (DBP) president and chief executive officer Francisco del Rosario said during the opening of the PPP conference on infrastructure projects Thursday. The money to be pooled under the Philippine Infrastructure Development Fund — now being established by the Department of Finance — will be made available within the timeframe envisioned by the national government for rolling out the infrastructure projects under the initiative, he said. The GFIs that will contribute the fund to jumpstart the PPP include DBP, Government Service Insurance System (GSIS), Land Bank of the Philippines and the Social Security System. The P200 billion would complement the P12.5-billion budget the Aquino administration has proposed to Congress under the 2011 budget appropriations, Del Roasario said. In providing the seed money for the PPP initiative, the GFIs aim to quicken infrastructure development, promote the spirit of public-private partnerships, and finance qualified infrastructure projects via long-term funding in local currency that will be made available to project partners. The fund support may entail the purchase of PIDF Bonds to be issued by the National Development Company (NDC), the investment arm of the government, the DBP executive said. “One of the financing options we are currently evaluating is for NDC or another GOCC [government-owned and –controlled corporation] that may be designated by the DOF to issue the PIDF bonds." The bonds will be issued in various tenors or maturities from five to 25 years, depending on the amount of financing a project will need, Finance Secretary Cesar Purisima told reporters earlier. Credit rating agency Standard & Poor on Friday gave long-term Philippine debts a BB rating, from BB-, bringing the country’s sovereign obligations two notches from investment grade. Proceeds of the bonds would finance land acquisition for right-of-way costs and other pre-development needs as the government’s counterpart initiative to attract investors. — VS, GMANews.TV