MACTAN, Philippines--The Philippines will have to amend existing laws to attract more foreign investment in its public-private partnership infrastructure projects, the executive director of the PPP Center said Friday.
The passage by Congress of the proposed PPP Act will help remove investors' apprehensions that the initiative will be discontinued once a new president is elected in 2016, Cosette Canilao told The Wall Street Journal on the sidelines of the meeting of finance ministers from the Asia Pacific Economic Cooperation, or APEC.
The PPP Act will ensure that the reforms introduced by the PPP Center are established by law to ensure stability and predictability. The PPP Center oversees big-ticket infrastructure projects.
"It will send a message to the private sector that the program will continue beyond this administration," said Ms. Canilao, alluding to the Philippines' reputation of changing contract parameters after the private sector completes major projects.
She said the government will also have to pass the bill to allow the speedier acquisition of rights of way for road and other infrastructure projects. Often, infrastructure projects are delayed because lands marked for roads haven't been acquired by government due to protracted negotiations with land owners.
Ms. Canilao said the Philippines may also have to revise its constitution to allow foreign investors to take a majority stake in major infrastructure projects, which are considered utilities.
The Constitution currently caps foreign ownership at 40% of utilities. This means foreign investors have to first take in a local partner to participate in PPP projects considered utilities such as toll roads and airports.
"That would be a game change if it happens," said Ms. Canilao. But she acknowledged it may be difficult to do that because revising the Constitution is a politically charged issue in the Philippines.
The PPP Center has lined up nearly five dozen infrastructure projects such as toll roads, sea and air ports, and train systems, valued at $24 billion. It has awarded a total $4.2 billion worth of projects and is set to ask for bids on $ 11.2 billion more of projects before President Beigno Aquino III steps down from power.
Ms. Canilao said pursuing the PPP projects beyond the Aquino administration is necessary because it would free up more government funds to finance social services and other projects needed by the people.
She said discussions are now being undertaken by the PPP Center with the Philippine Stock Exchange and investment bankers to find a way to help investors in PPP projects to secure additional financing for their ventures.