Government mulls infra bonds to finance projects under PPP

MANILA, Philippines - The Aquino administration is planning to issue infrastructure bonds to finance projects under its public-private partnership (PPP) program, Finance Secretary Cesar Purisima said yesterday.

Proceeds of the bonds would help fund solicited projects within the next three years, Purisima also said.

“We will create a pool of funds to support solicited projects and we will issue bonds as necessary,” he told reporters yesterday.

The bonds, to be issued locally, will mature in 20 to 25 years or less depending on the terms or length of the infrastructure project.

The Aquino government will be holding a planned PPP conference on

November 18 and 19 to showcase to investors at least 10 infrastructure projects that are ready for implementation.

While Purisima declined to identify the projects, he said these are in different areas such as food supply chain, food security, water, transport and other key areas.

He believes that if the government is able to attract enough investors for infrastructure project then it can expect a significant improvement in economic growth.

Purisima said there will be 10 more infrastructure projects in the pipeline in 2011 and more than 10 projects in 2012.

The government is also finalizing talks with multilateral agencies on how they can participate in the planned PPP program for infrastructure funding.

The government is projecting growth to hit five percent to six percent this year but officials said actual growth could exceed the higher end of the target range because of hefty inflows from dollar remittances.

Faced with a budget deficit that is projected to hit P325 billion this year, the Aquino administration wants to use government funds mainly for social services and tap private sector help for needed infrastructure projects.

As of end-September, the budget gap has already ballooned to P259.8 billion, up from P237.5 billion a year earlier.