RP, WB to discuss $50b projects

RP, WB to discuss $50b projects

MANILA (AFP): The Philippines and the World Bank said yesterday they will convene a high-level meeting next week to boost private investment in the country's infrastructure, expected to cost US$50 billion over the next decade.

A World Bank statement said Manila would have to invest heavily in these areas "to make up for past shortfalls and to support the expected higher economic growth in the future."

Alan Ortiz, a presidential aide on foreign-funded government projects, said at least 20 senior officials from overseas financial institutions were expected to join key government officials, senior private Filipino executives and World Bank officials at the Dec. 12-13 meeting here.

"Assuming an average annual economic growth rate of between four and five percent, investments in power, telecommunications, transport, water supply and sanitation may roughly total between $40 billion and $50 billion during the 10-year period" from 1995, it said.

Up to $20 billion would have to be invested in the power sector, and as much as $7 billion in telecommunications and up to $18 billion in transport, it added.

Senior World Bank advisor Harinder Kohli said "it is clear that the need for investments in the future will far exceed the levels of the past. The demand will also outstrip the financial and managerial resources of the state alone."

Callisto Madavo, a World Bank department chief with responsibility over an area that includes the Philippines, said in the statement that recent Philippine success at opening infrastructure financing to the private sector, especially in power, were being carefully watched by other countries.

The World Bank said that the initial focus of the public- private partnership in Philippine infrastructure would be to attract international companies and finance.

However, over time "domestic investment and capital markets are expected to play an increasing role."

It said that while the private sector had an important though limited role in some segments of infrastructure in the country, the bulk had been provided by public monopolies, which were unable to meet demand. This was demonstrated in the energy crisis of the late 1980s and the early 1990s.

Manila now expects all future generation capacity to come from private plants, and similar reforms are under consideration in telecommunications, water supply and sanitation, along with the ports sector, it said.

The bank said there were "remaining concerns about consistency and transparency of government policies" the lack of long-term debt financing and underdeveloped domestic capital markets.