Philippines Sector Brief – Infrastructure

I. Quick Facts
• The government awarded 12 infrastructure projects worth $4.8 billion since 2010 under the public private partnership (PPP) scheme, making the Philippines one of the most active infrastructure markets in Southeast Asia
• Ranks 91st globally in terms of overall infrastructure quality rankings, 87th in terms of road infrastructure, 80th in railroad infrastructure, and 108th for air transport infrastructure in the WEF Competitiveness Report 2014
• In 2010, the government invested mere 1.8% of GDP in infrastructure, but this rose to 2.7% of GDP in 2014, and is projected to rise to at least 5.0% and 5.4% in 2016 and 2018
• Converging with PPP Projects, the construction sector’s forecasted real growth 8.5% and 8.7% in 2016 and 2017 respectively
• The Philippines has 10 international airports and 34 main airports serving domestic flights
• Seoul-based debt watcher NICE Investors Service recently upgraded the credit rating of the Philippines primarily due to “expanded infrastructure and social overhead capitals in the form of public-private partnerships”

II. Business Opportunities
• The Public-Private Partnership is a valuable tool in developing the Philippine infrastructure. It allows the private sector to finance the construction, operation and maintenance of infrastructure projects. Click here to view PPP’s pipeline of projects including the projects that are for bidding

III. Key Players
1. Arthaland
2. Ayala Land
3. Century Properties Group Inc.
4. DMCI Homes
5. Megaworld Corp.
6. Metro Pacific Tollways Corporation
7. Robinsons Land Corporation
8. Rockwell Land Corporation
9. San Miguel Properties
10. SM Development Corporation (SMDC)

IV. Challenges
• The inadequate supply of infrastructure ranked as the 2nd most major setback in doing
business in the Philippines. There is increasing demand for more and better transportation
systems/ infrastructure projects as population grows. Whilst presently it is a challenge, this provides opportunities in the future as gleaned in the government’s increased budget
allocation to infrastructure projects
• The need for a more transparent and competitive bidding, quicker approval on PPP projects, and a strengthened institutional framework

V. Trends
• There is a proposed PPP act to amend the country’s Build-Operate-Transfer (BOT) Law
which could potentially fast-track the implementation of PPP projects
• More PPP projects are expected to be implemented in the coming years to sustain economic demand particularly from the tourism sector

Sources: BMI Research, EU Business Advocacy Papers, Public-Private Partnership

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Sectors: Construction
Countries: Philippines
Topics: Market Research
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