PROJECTS approved by the Board of Investments (BoI) — which accounts for the biggest amount of such commitments among the government’s seven investment promotion agencies — have exceeded an official P500-billion target for 2017 by nearly a fourth at P616.7 billion weeks before the year ends, the BoI said in a press release on Monday.

BoI said 2017’s preliminary amount — which the agency described as the biggest in its 50-year history — is 39.5% more than the P442 billion it approved last year.

The agency notched its previous biggest approved investment level in 1997 at P570.1 billion, “mainly from investments due to the privatization and deregulation of public utilities,” particularly of water supply and telecommunications.

Proponents of such investments are eligible for fiscal and non-tax incentives upon approval.

This year’s haul consisted of 426 projects — 13% more than last year’s 378 projects — that are projected to generate around 76,065 jobs upon full operation, up 12.5% from 67,634 jobs in 2016.

“We were happy then to just reach our P500-billion target. But to blitz past the P600-billion mark is something we are definitely ecstatic as this only proves the continuing confidence of the investors in making their business grow in the Philippines,” the statement quoted Trade and Industry Secretary Ramon M. Lopez as saying, adding that his department was “expecting sustained higher investments for the next five years.”

Mr. Lopez said further that latest data on investment pledges showed the momentum for overall economic growth — recorded at 6.7% in the first three quarters against the government’s 6.5-7.5% full-year target for expansion of gross domestic product (GDP) — “definitely carried over in the fourth quarter, investment-wise and further boosted with the frenzied economic activity given the holiday season.”

The same statement quoted BoI Managing head Ceferino S. Rodolfo said investment pledges went to “key manufacturing industries such as cement, sugar and petrochem,” among others.

Power and energy projects — which topped other sectors in terms of investment pledges — brought in P268.168 billion in approved investments, followed by infrastructure and public-private partnership projects with P127.658 billion, real estate and mass housing projects with P86 billion, as well as transportation and logistics with P15.909 billion.

“The increase in infrastructure projects this year supports the BoI’s push for the growth in economic activities outside Metro Manila and the ‘Build, Build, Build’… massive infrastructure program of the administration,” Mr. Rodolfo said.

Investment pledges in manufacturing — the sector which economists have tagged as the one that has the biggest potential for generation of meaningful jobs — nearly doubled to P96 billion from P49.259 billion in 2016.

Japan topped all other sources of foreign investment pledges BoI has approved so far this year, contributing P8.864 billion, mainly in green ship recycling, chemicals and glass manufacturing, among others.

It was followed by Singapore with P3.497 billion, Australia with P1.996 billion and the British Virgin Islands with P1.084 billion — all in renewable energy — as well as the Netherlands with P1.074 billion involving manufacturing.

The BoI said government efforts to disperse economic activities outside Metro Manila resulted in a 53% year-on-year decrease in approvals for the National Capital Region (NCR) and a 65% hike in those for areas outside NCR.

Still, the three regions that cumulatively accounted for 62.9% of GDP last year — Region IVA or CALABARZON, Region III or Central Luzon and NCR — attracted a big chunk of investment pledges.

Region IVA — consisting of the provinces of Cavite, Laguna, Batangas, Rizal and Quezon (CALABARZON) south of Metro Manila — topped the country’s 16 other regions with P294.6 billion worth of BoI-registered investment pledges, accounting for 48% of the total by its own.

CALABARZON was followed by Region III (Central Luzon) immediately to NCR’s north with P123.3 billion, and Metro Manila itself with P44.3 billion.

BoI identified the other regions that cornered “substantial investments as Region 1 (Ilocos Region) with P39.6 billion and Region 7 (Central Visayas) with P35.6 billion.

Complete year-on-year comparisons were not given. — AGAM

A SUBSIDIARY of San Miguel Corp. (SMC) has acquired the 630-megawatt (MW) Masinloc coal-fired power plant in Zambales for $1.9 billion, the conglomerate announced yesterday, furthering its standing as possibly the country’s biggest energy producer.

“We have not visited the plant. We don’t really know the condition of the plant,” Ramon S. Ang, San Miguel president and chief operating officer, told reporters at the company’s headquarters in Mandaluyong City.

He said the acquisition should bring the company’s total installed capacity to 3,693 MW, although he declined to confirm whether it now has the lead.

“There’s a good chance that we might be,” he said.

Company officials said SMC Global Power Holdings Corp. on Monday reached a share purchase agreement with AES Philippines Investment Pte. Ltd. and Gen Plus B.V. The two are the equity holders of the plant’s owner Masin-AES Pte. Ltd.

SMC Global is the holding company for San Miguel’s investments in the power industry. It bought the equity stakes in Masin-AES of both AES at 51% and Electricity Generating Public Co. Ltd. at 49%.

It bagged the plant after two sets of bids for the plant — one in September and another October.

The listed conglomerate’s share price fell 1.27% to end P108.80 apiece yesterday, even as the holding firms sectoral index finished up 0.92%.

Before the briefing for reporters, San Miguel quoted Mr. Ang as saying in a statement: “We are happy to be able to acquire Masinloc.”

“The additional power assets provide us an opportunity to increase our footprint in clean coal technology that provides reliable and affordable power, particularly in Luzon,” he explained.

“In fact, we have substantially reduced emissions even from our existing power plants to continue promoting the economy’s growth and produce energy in an environmentally responsible way.”

Asked about its plan for the Masinloc plant, Mr. Ang said the company was not sure yet.

“I think it’s a good investment.”

San Miguel pegged the “implied enterprise value” of Masin-AES — based on the transaction — at $2.4 billion. It said the valuation is net of cash, and the buyer would assume the acquired entity’s payables.

The sale also includes the 335-MW coal-fired unit now under construction and the 10-MW Masinloc energy storage project being commissioned.

The new unit will use supercritical boiler technology that will result in higher efficiency and significant reduction in carbon dioxide emission, San Miguel claimed in its statement.

The conglomerate added that completion of the agreement is subject to the satisfaction of certain conditions, including approval by the Philippine Competition Commission “and the final execution of the definitive agreements.” — Victor V. Saulon

By Elijah Joseph C. Tubayan
Reporter

THE Public-Private Partnership (PPP) Center plans to focus next year on water-related local government works amid the current government’s decision to use official development assistance (ODA) and state funds more for construction of big-ticket projects.

“There really has to be more attention on projects for local governments. The biggest sector that we have really is the water and sanitation,” PPP Center Executive Director Ferdinand A. Pecson said during a year-end press briefing yesterday at the agency’s headquarters in Quezon City.

At the same time, he said most projects that the center is looking at “still have to pass the feasibility studies stage.”

Asked how many projects the agency hopes to roll out next year, PPP Center Deputy Executive Director Eleazar E. Ricote replied: “Five to eight water-related projects in local government units (LGUs) and local districts, including unsolicited proposals.”

Those in more advances stages include the P84-million Baggao Water Supply Project currently under procurement and the Pampanga Bulk Water Supply Project unsolicited proposal of MetroPac Water Investments Corp. currently under negotiations with Pampanga’s provincial government, according to Mr. Ricote.

“We are also looking at LGUs in Bohol, Oriental Mindoro, also in Cagayan De Oro; they want to expand in sanitation, so we are talking to them. Were talking to the water districts and we’re actively assisting them with the terms of reference, procurement activities,” Mr. Ricote said.

He added that water sanitation systems in Catbalogan, San Ramon Newport Project, Samar Solid Waste Management project in Cebu, and a public market in Los Baños are also in the center’s LGU PPP pipeline.

Mr. Pecson said they may even bundle up similar projects of various LGUs to make them more attractive to prospective investors.

“Either several municipalities, or even let’s say towns and cities in one province together, to make the project bigger in scope and more interesting to investors. So that is also something that we’re looking at,” he said.

However, the PPP chief said that local governments’ limited capacity remains a constraint in undertaking otherwise vital development projects.

“One thing still that is quite universal is the lack of capabilities to develop projects. It’s true for national government agencies, but its more significant with LGUs,” said Mr. Pecson, while noting that the agency conducts training on government procurement and PPP processes.

‘THAT’S A GOOD THING’
Sought for comment, John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, said in a telephone interview said that his still welcomes the move, and that it “doesn’t matter” whether the PPP Center are focusing on smaller-scale projects.”

“In general, there should be more PPPs by local governments. That’s a good thing,” said Mr. Forbes.

“I think the ‘Build, Build, Build’ is moving, and there’s plenty of projects to be done. We are extremely excited about ‘Build, Build, Build’,” he continued.

“PPP was always icing on the cake, it wasn’t the only way. It’s moving in the right direction.”

Moreover, the PPP Center remains keen on participating on national-level big-ticket infrastructure projects and hopes that Congress will approve next year proposed amendments to Republic Act No. 7718, sometimes referred to as the build-operate-transfer law that was enacted in 1994.

The amendment is one of the measures identified by Malacañang and Congress as priorities needed to spur economic development and make it more inclusive.

“Hopefully we get to that. It depends on how quickly we go to harmonize all the bills,” said Jeffrey I. Manalo, PPP Center director for Policy Formulation, Project Evaluation and Monitoring Service.

The proposed law is currently undergoing technical working group discussion under the House of Representatives Committee on Public Works, Mr. Manalo said.

The bill aims to streamline the PPP process with simplified rules, as well as improve governance and transparency standards.

“In terms of lessons learned, it would reduce the time to get these projects going. The PPP Act more clearly [defines] how complaints by losing bidders would be addressed in a more timely way. So we would address past issues,” he said.

The current government of President Rodrigo R. Duterte has shifted away from pure PPP schemes favored by the past administration of former president Benigno S. C. Aquino III, and now employs a “hybrid” type that taps state funds and ODA for the construction of priority public infrastructure, leaving PPP for the operation and maintenance of projects once completed.