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PH shifts from debts to PPPs as P334.7-billion flagship projects move forward

Article (news)

Raine Musñgi

ABS-CBN News

MANILA — Facing tighter fiscal space and rising borrowing costs, the Philippine government is relying more heavily on public-private partnerships (PPPs) to build major infrastructure, with the Marcos administration saying that private capital, not additional public debt, will increasingly drive the country’s next wave of projects.PPP Center Executive Director Undersecretary Rizza Blanco-Latorre said the government recognizes there is only so much official development assistance (ODA) and public borrowing it can absorb, making private-sector participation more critical than ever.“There’s a limit to the amount of ODAs and loans that we can absorb,” Blanco-Latorre said on ANC’s Business Outlook. “It has been recognized that there is so much potential in tapping the private sector to help us narrow the gap in our infrastructure.” The PPP Center currently has 251 projects worth more than P3 trillion in its pipeline, spanning transport, water, power, health, education, information technology and property development.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/OfeAva0U000??si=y0bVbFvQneqb6j2b&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>Among the government’s biggest priorities are two flagship PPPs worth a combined P334.7 billion that are targeted for award this year.The largest is the P229-billion North-South Commuter Railway (NSCR) Operations and Maintenance Project, which remains under procurement and will undergo reapproval after revisions to some project terms.Also moving through procurement is the P105.7-billion Public-Private Partnership for School Infrastructure Project Phase III (PSIP III), recently approved by the Economy and Development Council chaired by President Ferdinand Marcos Jr. The project will build 16,459 classrooms across 1,095 public schools in Luzon, directly benefiting at least 800,000 learners annually. Government estimates also show the project could generate around 57,000 jobs and save about P40.15 billion through the PPP delivery model. Blanco-Latorre said the classroom initiative is part of the government’s effort to address the country’s estimated 165,000-classroom backlog, with PPPs helping accelerate construction that traditionally took years.Despite the expanding pipeline, Blanco-Latorre acknowledged that the biggest hurdle is no longer financing.“The majority of the 251 projects belong to the transportation sector. Right-of-way remains the biggest bottleneck,” she said. She added that investors are prepared to deploy capital once land issues are resolved.“Funding is not a problem because if it’s a PPP, the private sector is ready, but they cannot deploy the funds because there’s a property to work on,” she said. To address delays, Blanco-Latorre said the government is preparing to implement the Accelerated and Reformed Right-of-Way (ARROW) Act, which was signed in September 2025.According to her, the implementing rules and regulations have already been completed and are awaiting final signature before taking effect.Once implemented, the measure is expected to streamline land acquisition, clarify property valuation, speed up compensation to landowners and improve relocation procedures — all key issues that have delayed infrastructure projects for years.Beyond right-of-way reforms, the PPP Center is also drafting guidelines for a new Risk Management Fund (RMF) under the PPP Code.The fund will cover contingent liabilities and contractual obligations arising from PPP projects, addressing investor concerns that emerged from previous disputes between government and private concessionaires.Blanco-Latorre stressed, however, that the government’s strategy is not to provide blanket guarantees to investors.“Our focus is less about government taking on more risk. It is actually more about assigning risk to the party best able to manage them,” she said. She said reforms under the PPP Code — including viability gap funding, the proposed Risk Management Fund and right-of-way reforms — are intended to create a more balanced and bankable investment environment while protecting public resources.For Blanco-Latorre, the shift represents more than a financing strategy. It reflects a broader effort to tap private-sector expertise and efficiency to deliver long-delayed infrastructure that supports economic growth, improves public services and strengthens the country’s competitiveness.

Facing tighter fiscal space and rising borrowing costs, the Philippine government is relying more heavily on public-private partnerships to build major infrastructure.

Facing tighter fiscal space and rising borrowing costs, the Philippine government is relying more heavily on public-private partnerships to build major infrastructure.

PH shifts from debts to PPPs as P334.7-billion flagship projects move toward award

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PH shifts from debts to PPPs as P334.7-billion flagship projects move toward award

Raine Musñgi,

ABS-CBN News

Published July 10, 2026 12:57 PM PHT

Read More:

PPP

public private partnership

ODA

official development assistance

infrastructure

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