PBBM accepts PSAC recommendations on key Infra areas
On Thursday, March 9, in their second meeting with President Ferdinand “Bongbong” Marcos, Jr., the PSAC Infrastructure Sector shared the substantial progress on matters arising from their initial September 2022 meeting, as well as additional recommendations based on the private sector expertise and experience.
Infrastructure plays a crucial role in boosting the local economy, with investment in infrastructure development creating jobs, stimulating growth, and improving living standards. Joining President Marcos, key cabinet officials were also present in the meeting, underscoring its significance and providing close coordination and immediate feedback. With private sector business leaders and experts, there is a shared commitment towards ensuring the successful execution of infrastructure policies and projects all for the benefit of the Filipino people.
“I’m happy to note that the recommendations that were given us by the Private Sector Advisory Council were essentially many of the things that we were already doing,” President Marcos said.
“And in fact, the list of recommendations that they gave, I would say half of them, are either in progress or have been completed. So we are once again moving in the right direction together with our private sector partners,” the President added.
PSAC Lead Convenor and Aboitiz Group President and Chief Executive Officer (CEO) Sabin Aboitiz leads the Infrastructure Sector. He was joined by PSAC Infrastructure Sector members: Globe Capital Partners Chairperson Joanne de Asis, Metro Pacific Investment Company (MPIC) President Manny Pangilinan, Atok-Big Wedge Co. President Eric Recto, San Miguel Corporation CEO Ramon Ang, and International Container Terminal Services Inc. (ICTSI), Solaire, and Prime Infrastructure President Enrique Razon.
The additional PSAC Infrastructure Sector suggestions were divided into five categories: water, transport and mobility, logistics, energy, and public-private partnerships (PPP).
On the water sector, MPIC President Manny Pangilinan presented, citing the various challenges plaguing clean water accessibility, from the over-dependence on depleting groundwater to the highly fragmented governance structure.
Last September, the Infrastructure Sector noted that a bill mandating the creation of the Department of Water Resources (DWR) was included in the President’s priority legislative agenda. In the latest meeting, PSAC recommended its certification as urgent, while additionally suggesting the adoption of an Integrated Water Resources Management Program with the creation of a National Water Resources Management Office. The President responded that the government will be creating an interim water body.
In attendance at the meeting from the government in relation to the water sector were Department of the Environment and Natural Resources (DENR) Secretary Antonia Loyzaga and Department of Public Works and Highways (DPWH) Secretary Manuel Bonoan. The DPWH has a Bulk Water Master Development Plan. The PSAC Infrastructure Sector additionally recommended increasing funding support for water projects and sewage treatment, while also incentivizing the private sector to invest.
PSAC also recommended the adoption of a water tariff based on affordability instead of a straight-line cost per cubic meter.
Transport and mobility
For the transport and mobility sector presentation, Aboitiz Group President and CEO Sabin Aboitiz highlighted that in the World Economic Forum (WEF) ranking of global competitiveness in air transport efficiency, the Philippines lies low at 96 out of 141 countries. With flight propensity increasing to pre-pandemic levels, it is imperative to improve transport and mobility infrastructure to support economic recovery and growth.
In attendance at the meeting from the government for the transport and mobility sector was Department of Transportation (DOTr) Secretary Jaime Bautista, Civil Aviation Authority of the Philippines (CAAP) Director General Capt. Manuel Antonio Tamayo, and Manila International Airport Authority (MIAA) General Manager Cesar Chiong.
The PSAC Infrastructure Sector recommended quick wins with the rehabilitation of NAIA through PPP and the expedition of the award process of projects with original proponent status this 2023. During the meeting, the DOTr commented that there are ongoing NAIA privatization terms of reference being developed by the Asian Development Bank (ADB) that will soon be published. In the medium- and long-term, PSAC proposed the development of an aerodrome strategy and airport master plan by DOTr and CAAP.
For the logistics sector, ICTSI, Solaire, and Prime Infrastructure President Enrique Razon was joined by subject matter expert and ICTSI Executive Vice President Christian Gonzalez. In their presentation, PSAC showed that the logistics industry is too geographically concentrated, with the ports outside of Manila underutilized. The current port set-up often leads to double or even triple handling of cargo, resulting in higher handling costs and time delays.
In attendance at the meeting from the government for the logistics sector was Philippine Ports Authority (PPA) General Manager Jay Santiago.
PSAC recommended that key PPA assets be identified and developed into regional hubs capable of handling international cargo, Razon suggesting that the Iloilo port could be developed into another international port. This would ultimately lead to reduced costs and time to market for imports, as well as provide the local agricultural industry with direct global access.
For the energy sector, Aboitiz presented the projected power supply shortage in the Luzon Grid, and the increase in prices in the Wholesale Electricity Spot Market (WESM), among other energy issues the average Filipino faces.
In attendance at the meeting from the government for the energy sector was Department of Energy (DOE) Secretary Raphael Lotilla, and Energy Regulatory Commission (ERC) Chairperson and CEO Atty. Monalisa Dimalanta.
PSAC recommended strengthening local government units (LGUs) to facilitate and implement energy projects. Currently, the DOE has provided support to the National Grid Corporation of the Philippines (NGCP) in securing clearances from LGUs and other government agencies for three major projects: the Mindanao-Visayas Interconnection Project (MVIP), the Hermosa-San Jose Transmission Project, and the Cebu-Negros-Panay (CNP) Interconnection, all scheduled for completion this year.
For the medium- and long-term, PSAC also recommended rationalizing secondary price caps in order to open up new investments, factoring in prevailing market conditions, as well as connecting the Small Power Utility Groups (SPUGs) to the grid.
For PPPs, Aboitiz was joined by PSAC Infrastructure subject matter expert and Aboitiz InfraCapital President and CEO Cosette Canilao. They recognized the PPP policy milestones early on in the Marcos administration, including the amendment of the Build-Operate-Transfer (BOT) Law Implementing Rules and Regulations (IRR) following the PSAC Infrastructure Sector’s first meeting with President Marcos. Building on the positive progress, PSAC provided additional recommendations to strengthen PPPs for national development.
In attendance was National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan, who expressed support for the recommendation of increasing private sector participation in the PPP Governing Board (PPPGB) through the amendment of EO No. 136, s. 2013. An additionally suggested amendment to the EO was the adoption of an expedited evaluation of PPP projects from a six-step to a four-step process through a streamlined government evaluation and endorsement process.
Also in attendance from the government were Public-Private Partnership (PPP) Center Executive Director Cynthia Hernandez, Department of Budget and Management (DBM) Secretary Amenah Pangandaman, Department of Justice (DOJ) Secretary Jesus Crispin “Boying” Remulla, Presidential Advisor on Investment and Economic Affairs Joel Consing, Presidential Legislative Liason Office (PLLO) Secretary and Head Mark Mendoza, and Office of the Executive Secretary (OES) Undersecretary Leonardo Cervantes.