Government to privatize most railway O&Ms–Neda


THE national government is keen on privatizing most of the management, operation, and maintenance of the country’s railways, according to the National Economic and Development Authority (Neda).

In a virtual roundtable with the Financial Executives Institute of the Philippines (FINEX) on Wednesday, Neda chief and Socioeconomic Planning Secretary Arsenio M. Balisacan said railway privatization has been included in the list of Infrastructure Flagship Projects (IFPs) to be undertaken by the administration.

Balisacan earlier said the Neda Board approved P9 trillion worth of infrastructure flagship projects to be undertaken in the medium term. The list covers 194 projects, mostly focused on physical connectivity and water.

“Those are currently in the IFPs, in the infrastructure flagship project, the privatization, the PPP arrangements of the management, maintenance and operations of many of these rail systems is on top of our agenda. It will happen,” Balisacan said in response to a question raised by former Public Works and Highways Secretary Rogelio Singson.

Balisacan stressed that IFPs are projects that will be prioritized by the administration when it comes to annual budget preparation. These will also undergo “expedited approval processes consistent with current legal frameworks.”

At least 45 of these projects will be financed through PPPs. Balisacan said the government’s limited fiscal space will make PPPs a mode of financing to complement the government’s priorities in the medium term.

Currently, Balisacan said 97 PPP projects, collectively worth about P2 trillion, are already in the pipeline.

“Pursuing PPPs will allow the government to harness the private sector’s financial and technological resources, the ability to respond to market risks and opportunities in an agile manner, and the capacity to manage large-scale projects,” Balisacan said.

Infrastructure is a cornerstone of the administration’s plans to boost economic growth and generate jobs.

Balisacan said the government aims to spend 5 to 6 percent of GDP between 2023 and 2028.

For this year, the government intends to spend P1.248 trillion on infrastructure or 5.2 percent of GDP; and in 2024, the plan is to spend P1.37 trillion or 5.1 percent of GDP.

In 2025, the government aims to spend P1.43 trillion on infrastructure projects while in 2026, the administration will spend P1.57 trillion. In both years, infrastructure spending will account for 5 percent of GDP.

In the last two years of the administration, the government will spend P1.86 trillion or 5.4 percent of GDP in 2027 and P2.26 trillion or 6 percent of GDP in 2028.

“Building on the momentum gained from the work of past administrations, the Marcos Administration shall program between 1 and 2 trillion pesos per year through 2028 for infrastructure. This program is the target committed by the Development Budget Coordination Committee last December 2022,” Balisacan said in a presentation.

In a recent Senate hearing, Senator Joseph Victor G. Ejercito said legislating the Comprehensive Infrastructure Development Master Plan, a 50-year infrastructure master plan, is needed to boost the country’s growth and development to better guide the projects and programs of succeeding administrations.

Ejercito said a master plan, which will be “the plan of all plans,” will also allow the country to catch up with its neighbors.

However, Neda said that while it supports this proposal, there is the matter of passing a Land Use Act that could better facilitate the implementation of infrastructure projects.

Neda Assistant Secretary Jonathan L. Uy said implementing projects whether at the national or regional level depend on the local land use plans.

The proposed National Land Use Act has been languishing in Congress for over 30 years.

Image credits: Nonie Reyes