Private sector nixes P50-billion infrastructure fund counterpart

MANILA, Philippines - The private sector will no longer be putting up its half of the P100 billion infrastructure fund, an economic manager said.

Last October, businessmen led by the Philippine Chamber of Commerce and Industry (PCCI), informed President Arroyo that they would put up a counterpart of P50 billion if the government can come up with P50 billion to pump prime the economy.

The government has tapped state run financial institutions to come up with their share of the fund.

Trade Secretary Peter B. Favila said they have agreed to scrap the private sector’s P50-billion counterpart. Instead, the private sector will be given a list of priority projects they can fund.

“Any proponent can come to a GFI (government financial institution) to finance infrastructure projects under the MTDP (Medium Term Development Plan),” Favila told reporters yesterday.

Favila said private businesses may see this as a viable investment given the high risk in the market today. In financing the project, the government will guarantee 85 percent through the Philexim while 15 percent represents the project proponent’s equity.

Favila said this would be easier for everybody involved in the project to monitor the developments.

He said there are currently available projects for funding such as the connection of the North Luzon Expressway to C-5.

Earlier, PCCI called for a creation of a monitoring group for the infrastructure fund.

“We want a monitoring group composed of church leaders, representatives of the business organization, the government and probably the academe,” PCCI president Edgardo Lacson said.

He said funders must be represented in the monitoring team in order to assure people putting up money that they will be able to earn from their investment.

He explained that choosing which project to fund is crucial because the aim of the fund is to pump prime the economy.