BDO offers to finance P42-B PPP projects

MANILA, Philippines - BDO Capital & Investment Corp., the investment arm of the SM Group, is eyeing to finance some P42 billion worth of projects under the Public-Private Partnership (PPP) program of the government, a top company official said.

BDO Capital president Eduardo Francisco told reporters on the sidelines of the Economic Journalists Association of the Philippines (EJAP) induction of new officers Friday that they are ready to lend to the winning bidders of the two major PPP projects, namely LRT 1 and NAIA Expressway.

“BDO is preparing already  staple financing for LRT 1 and NAIA Expressway. LRT1 is roughly P30 billon. NAIA Expressway is roughly around  P10-12 billion. We are ready to finance the winning bidders already. We are looking at that. If it pushes through, it could amount to a total of P42 billion,” he said.

The LRT 1 project involves the operations and maintenance of the existing LRT Line 1 system, the construction of the Line 1 Cavite Extension, and the O&M of both existing and extension as an integrated system. The construction of the tracks, the stations and all its attendant facilities, as well as O&M, is worth about P30 billion.

The NAIA Expressway project, on the other hand, is composed of two phases wherein the first phase started in 2003 and was completed in 2010. It is a fully elevated expressway that runs from the Metro Manila Skyway to Sales Road near NAIA Terminal 3 with ramps beside the Resorts World leisure and gaming complex.

Aside from these, Francisco said they would also be studying possible participation in other infrastructure-related PPP projects.

According to Francisco, 2013 will be a busy year for BDO Capital as they anticipate a lot of capital raising schemes by both listed and non-listed firms through bond issuances, stock offering and borrowings .

He said listed firms may opt to raise funds due to the current changes in tax rules which may favor stock issuers.

“A lot of the conglomerates, companies may look at refinancing because of the new RMCs (revenue memorandum circulars), tax laws. Corporate issuers are revisiting their current borrowing if they would be hit by the new tax rules,” he said.

Non-listed entities, he said, might also consider raising funds this year to get ready for the ASEAN integration in 2015.

“Some may not see the need for listing their shares right now but may reconsider in anticipation of the ASEAN integration in 2015. They may want to be the first ones on the list of listed firms once the ASEAN market becomes integrated,” he said.

A number of financial institutions, he noted, may also need to raise capital to meet the Basel III requirement, a set of global banking standards.