HOUSE Committee on Ways and Means Chairman and Albay 2nd District Representative Joey Sarte Salceda said Thursday he will push for a stronger, more “attractive” framework for public-private partnerships (PPPs) in the 19th Congress, saying that such agreements “will be crucial in building modern and efficient public services during a time of tough fiscal conditions.”
“We have ongoing fiscal constraints, but we also have ongoing public needs. Infrastructure and social services will always be good and necessary investments. So, sourcing from outside the public sector will be very crucial,” Salceda said in comments after a meeting with incoming Department of Public Works and Highways (DPWH) Secretary Manuel “Manny” Bonoan.
“We talked about how to move forward with PPPs, especially given the tight room for funding major projects. Sec. Manny appears to be quite ‘bullish’ about Philippine infrastructure development over the next six years. I think PPPs stand a very strong chance of playing a major role again in this new administration. Sec. Manny has been with both the public and private sectors for a long time. And PBBM [President-elect Ferdinand ‘Bongbong’ Marcos, Jr.] has, in many interviews, made very cogent [convincing] observations on the need for more flexible PPPs,” Salceda added.
Salceda, who is the principal author of the proposed PPP Reform Law in Congress and who chaired the bill’s drafting committee, says that he hopes PPP reforms also have a stronger chance of passing this incoming 19th Congress.
“The private sector, especially the large conglomerates, are awash with cash for PPPs. San Miguel has 301.7 billion [and] Aboitiz Equity Ventures has 107.5 billion. Ayala Corporation has 99.6 billion. SMIC has 93.9 billion. JG Summit has 292.6 billion. LT Group has P390.1 billion,” Salceda said.
“That’s a total of 1.285 trillion in cash for just these conglomerates alone. For perspective, Build, Build, Build [BBB] received just a 1.180 trillion budget for 2022. So, the private sector can fund infrastructure development many times over if we open participation to even more companies,” Salceda added.
Salceda also said that he is in talks with the incoming DPWH secretary on modernizing the infrastructure and transport sector.
“I discussed with Secretary Bonoan today how I hope to help his department with sourcing the necessary fiscal space for infrastructure. It is absolutely crucial that we maintain infrastructure as a spending priority,” he said.
“In fact, BBM’s first budget, I think, has to revolve around three key priorities or principles. First, we must maintain productive spending and keep it higher than the deficit as a share of GDP. Second, we must ensure that we contain personnel spending growth, which has ballooned to around a third of the budget by now. Third, our public spending must have higher economic multiplier effects and should be useful for longer periods,” Salceda said.
“But, we really need to expand fiscal space, either by collecting existing taxes better or by imposing new taxes. Because PPPs do entail the need for some fiscal space in the future. Basically, a PPP is advancing public welfare but deferring public costs. But the costs will come,” Salceda added.
Salceda said he briefed Bonoan about his thoughts on a “vertebral infrastructure system” to link major infrastructure projects as one national intermodal transport system, reforms in funding and preserving the infrastructure program, and making public works more economically beneficial.
Bonoan was the acting DPWH chief when Salceda was Presidential Chief of Staff during the Arroyo administration.