Power, factory, infrastructure ventures sought for growth

Posted on July 26, 2012

THE PHILIPPINES needs to attract investments in infrastructure, manufacturing and energy in order to sustain strong growth in the face of a slowing global economy, speakers at a forum yesterday said.

Roberto F. De Ocampo, vice-chairman at the Makati Business Club, said such investments can be channelled to the government’s flagship public-private partnership (PPP)program.

“The PPP program will be just the right thing to get things moving,” Mr. De Ocampo said at Security Bank Corp.’s “Economic Forum 2012: Realizing Opportunities for Growth in the Philippine Economy” held at Makati Shangri-La hotel.

Mr. De Ocampo noted pursuing PPP projects, especially those for infrastructure, should help achieve “sustainable growth.” The Philippine economy grew by a stronger-than-expected 6.4% in the first quarter from a muted 4.9% the previous year.

Out of 21 projects lined up for PPP, the government has so far awarded just one -- Ayala Corporation’s P1.96-billion Daang Hari-Southern Luzon Expressway Road link -- and rolled out three others, namely: the P10.04-billion PPP for School Infrastructure Project, the P60-billion deal involving the extension to Cavite and management of Metro Manila’s Light Rail Transit Line 1 and the $377.6-million Ninoy Aquino International Airport Expressway Phase II deal. Besides these projects, the P43.319-billion Cavite-Laguna Expressway project has secured the approval of the Investment Coordination Committee-Cabinet Committee and awaits final approval by the National Economic and Development Authority Board led by President Benigno S. C. Aquino III himself.

“The business community remains hopeful the remaining projects in the pipeline will be rolled out... before this administration is finished,” Mr. De Ocampo said.

He acknowledged growth contributions of agribusiness and business process outsourcing, but cautioned that “service industries alone will not make it for us.”

“We... have to attract manufacturing businesses to come in,” he said.

The country’s BPO sector is projected to reap $25 billion in revenues by 2016 from the $9 billion revenues booked in 2011, according to industry estimates.

“The business community is quite optimistic about where the country is and where we think the country is going,” Mr. De Ocampo said. “Even though things are still slow, the slowness to some extent presents challenges which can be turned into opportunities.”

Speaking in the same forum, Energy Secretary Jose Rene D. Almendras said more energy investments are needed to support the growth of the economy.

“We need to find as much energy sources in the Philippines as we can. The ideal scenario is to prepare for the demands of three generations ahead,” Mr. Almendras said.

“There are resources in he Philippines and the idea is the more exploration we do, the more we will find these energy sources,” he added. “Our country is growing fast... consumption growth should not be higher than our energy reserves.”

Hans-Helmut Kotz, economist at the Goethe University Frankfurt, said the Philippines may be affected by the euro zone debt crisis as it remains integrated with the world economy, though the country “is more resilient” than some of its peers in the region.

“There are three channels the country may be affected: capital markets, banking relationships and trade,” Mr. Kotz said.

Capital markets will be affected by a slowdown in investments from countries affected directly by the debt crisis, banking problems may arise for those relying on funds from European banks, while trade impact will be manifested in reduces shipments.

However, Mr. Kotz noted “The Philippines is more resilient than other economies in the Asian region... it has substantial capacity to adjust.”

Both the International Monetary Fund and the World Bank last week raised their projections for 2012 Philippine economic growth to 4.8% and 4.6%, respectively from 4.2% announced earlier this year, citing the country’s strong macroeconomic fundamentals. -- K. A. Martin