PPA: 12 ports up for privatization

MANILA, Philippines — Not only airports are being privatized in swift succession by the government, but seaports, too, are lined up for public-private partnerships (PPPs), with 12 set to be turned over this year.

The Philippine Ports Authority (PPA) is preparing to complete the PPP of 12 ports in Luzon and Mindanao as part of efforts to tap private resources for infrastructure management.

Based on a list obtained by The STAR, the PPA aims to turn over to private control this year the ports of Balingoan, Jasaan, General Santos, Lucena, Roxas, Mansalay, Bulalacao, Bansud, Pola, Puerto Galera, Abra de Ilog and San Jose.

Both the ports of Balingoan and Jasaan are in Misamis Oriental, while the port of General Santos is located in South Cotabato. PPA general manager Jay Santiago said his agency has wrapped up the feasibility studies (FS) for the Mindanao ports.

Meanwhile, Oriental Mindoro houses the ports of Roxas, Mansalay, Bulalacao, Bansud, Pola and Puerto Galera. The port of Lucena is in Quezon, while the ports of Abra de Ilog and San Jose are both in Occidental Mindoro.

All of the Luzon ports are awaiting the delivery of their FS, but Santiago said the PPA can finish both the studies and bidding this year.

“At this stage, only Balingoan, Jasaan and General Santos have feasibility studies that include an indicative financial model,” Santiago told The STAR.

“For the rest of the ports, the estimated concession fees are still being developed in compliance with the PPP Code and its (implementing rules and regulations), which require the completion of FS before finalizing the valuation, structuring and procurement strategy,” he added.

Santiago said the PPA is aggressive in handing over ports to the private sector given the limited resources that the agency has. As logistics demand goes up, these ports have to be expanded, and it will be difficult for the PPA to fund all of these projects on its own.

Further, the agency wants to maximize the resources and technologies that the private sector has in running infrastructure projects. Santiago said these capabilities can lead to better services and business efficiencies.

The PPA is taking its cue from the Department of Transportation, which is working to privatize the operations and maintenance of transport projects like airports and railways.

“We are accelerating these initiatives mainly to support the national policy on PPPs as a catalyst for investments, jobs and more competitive logistics across the country,” Santiago said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said traders and travelers benefit when the government turns over ports to the private sector.

He said private partners tend to invest in solutions that simplify most procedures, which are otherwise tedious to comply with when processed with a government agency. This is particularly beneficial in ports, where time is of the essence for the movement of cargo.

“Privatization of ports would help expedite decision-making, especially on new investments and expansion plans in port operations. This is unlike the longer approval process entailing the many requirements in the government,” Ricafort told The STAR.

However, Ricafort warned the PPA that the logistics industry remains in limbo, especially as US tariffs are scheduled to go up, and this could make investors think twice before taking over ports at this time.

In spite of the tariff threat, the Philippines is showing no signs of a logistics slowdown, as cargo throughput in the first quarter of the year jumped by 11 percent to 65.77 million metric tons.

Last year, the PPA turned over the Iloilo Commercial Port Complex to the International Container Terminal Services Inc. through a P10.53-billion deal to operate and maintain the facility.