The Philippines has developed one of Asia’s most mature public-private partnership (PPP) frameworks, serving as a blueprint for neighboring countries as the Marcos administration aggressively taps private capital to fuel its infrastructure drive, according to Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan.
In a televised interview, Balisacan explained that the government’s pivot toward PPPs was a strategic necessity to sustain large-scale infrastructure projects amidst tight fiscal constraints and high debt levels inherited from the COVID-19 pandemic. He noted that the country’s current framework is now highly regarded in the region, second only to Singapore, though he acknowledged that governance challenges remain to be ironed out.
“What we have is very workable and it’s now copied by many governments by the way,” Balisacan stated.
“Many governments in Asia are coming in to learn what we have here because I think we have the most mature PPP other than Singapore. And the implementing rules and regulations that came out is very clear as well,” he added.
The DEPDev chief revealed that President Ferdinand “Bongbong” Marcos Jr. explicitly ordered a revival of the PPP model immediately upon taking office, marking a sharp departure from the previous administration’s heavy reliance on Official Development Assistance (ODA) for infrastructure funding.
The economic fallout of the pandemic left the new administration with little choice but to recalibrate its financing strategy.
“There’s no doubt, and I think they have seen the President’s high regard and priority for PPP. Almost immediately after he assumed office, his instruction to us was, ‘Let’s revisit, let’s get PPP back,’” Balisacan recounted.
“But when this administration came in, of course you are saddled with high debt, partly because of COVID. And so, the fiscal space is very much limited,” he added.
Faced with the challenge of maintaining aggressive infrastructure spending—traditionally hovering around five to six percent of the country’s gross domestic product—without overextending public finances, the government looked to the private sector as a viable lifeline.
“How could you continue a five to six percent infrastructure program under a much more constrained fiscal space?” Balisacan said.
“That’s when we said, okay, the private sector is so much awash with cash, both domestic and foreign. They can bring in new technologies, they can bring in better management for our infrastructure development. Let’s get PPP a major cornerstone for our infrastructure development,” he added.
To boost investor confidence and ensure project viability, the administration worked closely with the legislature to amend the country’s PPP laws, addressing crucial pain points such as risk-sharing mechanisms.
“And we did manage, with the cooperation of Congress, to pass the law quickly. And now we see the evidence of its success,” Balisacan said.
Balisacan, who previously led the National Economic and Development Authority during the Aquino III administration, highlighted that the revitalized PPP framework is already bearing fruit, particularly in the modernization and development of several international and regional airport projects across the country.