State treasurer cites private sector’s role in infra development

CEBU, Philippines - The role of the private sector is being recognized in unlocking finance for infrastructure development in the Asia-Pacific Economic Cooperation region, a Philippine finance official said yesterday.

National Treasurer Roberto Tan particularly emphasized the public-private partnership (PPP) mode of financing as a viable option in funding infrastructure projects.

While the APEC region's growth has come with unprecedented infrastructure development, there are still significant gaps, Tan said in his remarks during the opening session of the Finance and Central Bank Deputies meeting in Mactan Island, Cebu yesterday.

He particularly quoted the Asian Development Bank (ADB) which had estimated that Asia-Pacific needs $800 billion of annual financing for infrastructure development.

In a statement, Philippines Finance Chief Cesar Purisima said the private sector's participation is a "crucial determinant of success and sustainability" in any initiative for APEC especially the Cebu Action Plan which is due for approval and launching here today during the Finance Ministers' Meeting.

The details of the CAP have been presented to private-sector delegates here including financial industry players and chief executives of multinational investment banks.

During the meeting yesterday, they were expected to give suggestions on how the financial sector can help pursue the objectives of the CAP, a 10-year APEC development road map drafted by the Philippines. The plan seeks to achieve four key objectives: promote financial integration, advance fiscal reforms and transparency, enhance financial resiliency and accelerate infrastructure development and financing.

Treasurer Tan made some points on CAP's four objectives.

On transparency, he said economic gains of APEC's regional cooperation can further be enhanced through fiscal reforms and transparency.

He urged APEC member economies to plug holes in the "leaky fiscal bucket" to manage fiscal resources more efficiently.

On financial integration, Tan noted that lowering the cost of sending remittances and expanding financial literacy are two necessary factors to improve in this area.

"It is imperative for APEC to further advance financial integration as a driver for intensified infra-regional trade and investment," the treasurer said.

The official further explained that APEC must also work to create safeguards against shocks to fiscal resources from natural disasters and other unpredictable events.

"Fiscal reforms and transparency not only ensure sustainability but also makes fiscal policy reforms more responsive," he said.

Department of Finance Undersecretary Gil Beltran earlier said in a briefing Wednesday that several discussions and negotiations had already been done for CAP and that there's significant support for many of the policies and activities proposed to be included in the road map.

Beltran explained the CAP is to be adopted by APEC members on a voluntary and non-binding basis owing to limitations of policies and regulations in their countries. They, however, can eventually undertake the CAP initiatives once they get the full support of their Congress.

APEC finance ministers are meeting today to approve the CAP.  (FREEMAN)