Private sector to play major role in Philippines' infrastructure

The private sector will play a significant role in developing the country's infrastructure that could benefit the Philippines in the long term, a key player in the local business sector has said.

In his speech during the opening of the two-day Asia-Pacific Economic Cooperation - Informal Senior Officials’ Meeting (APEC-ISOM) held at the Shangri-La Hotel in Makati City on Monday (Dec. 8), Ayala Group of Companies Chief Executive Officer Jaime Augusto Zobel de Ayala said one of the APEC’s top priorities to make economic growth sustainable is a sound infrastructure system.

Achieving this goal requires the participation of the private sector, he said, noting that the Asia-Pacific region is experiencing a significant backlog in this area.

Zobel de Ayala, a member of the APEC Business Advisory Council (ABAC) and one of the ISOM's resource persons, said that in Asia alone, the Asian Development Bank has estimated the infrastructure backlog at $8 trillion into the year 2020.                                

In the ASEAN region, he said, the backlog is estimated at about $1 trillion.

Among the infrastructure sub-sectors that are significantly under-invested are transport networks in urban areas, information technology and communication, and trade and energy.

These areas also have the most potential to spur economic development, he said, adding that the Philippines’ infrastructure needs are massive that the country needs to tap various funding sources to meet these investments requirements.

"The private sector could be and should be, in my opinion, a significant contributor to help bridge the country’s infrastructure investment gap," Zobel de Ayala said.

"Whether through direct private sector investment or via public-private partnerships or PPPs, the private sector can help further expand the available investment base."

The World Bank has projected that the country’s infrastructure spending needs to be at five percent of its gross domestic product (GDP) to catch up with its Asian peers. Data however show that the country’s average spending on infrastructure since 2009 is only at 2.2 percent of the GDP.

The Ayala Group of Companies has major investments in the Philippines' water distribution services, as well as in the country's telecommunications industry.

The Philippines has reaffirmed its commitment to the APEC unified goal of building strong partnerships toward economic development.

In his keynote speech during the APEC-ISOM on Monday, Socio-Economic Planning Secretary Arsenio M. Balisacan highlighted the need to discuss such areas as enhancing regional integration, mainstreaming small and medium enterprises in global and regional markets, investing in human capital development, and building sustainable and resilient economies.

"Specifically, the Philippine vision for APEC 2015 is to sustain a prosperous and cohesive region that places inclusive development at the heart of economic integration in the Asia Pacific," Balisacan said.

The Philippines is hosting the APEC 2015, which carries the theme, “Building Inclusive Economies, Building a Better World”. (PCOO News Release)