Private sector looks to the markets
The Philippine government is recruiting the private sector to develop and upgrade the country's infrastructure. But how will the private sector raise the financing it needs on the international capital markets? By Maggie Ford
At the corner of Ayala Avenue, the main street in Manila's central business district of Makati, stands a small library containing historical books, photographs and documents. As the former control tower of an American military airport, the library premises are themselves a curious relic of the past. The avenue, now lined with the headquarters of the biggest Philippine corporations, started life as the airport's runway.
Fifty years on, the Philippines is obsessed again with trains, boats and planes, not to mention telephones, power stations and roads. A massive campaign to upgrade the country's infrastructure is under way, with $50 billion worth of projects on the drawing board.
It is not before time. Manila has thoroughly outgrown its 1960s-vintage infrastructure. (Years of dereliction and cronyism under the Marcos government before 1986 stifled planning.) Traffic jams are ubiquitous, water pipes date back to the late 19th century and in 1992 electricity shortages almost brought the economy to a complete halt.
Those "brownouts" galvanized the government. The private sector was mobilized and the power shortage was cured within months. Four years later, the Philippines has emerged as a major destination for private-sector investment in infrastructure one of only two developing Asian nations reckoned by the World Bank to have grasped the complexities of attracting private firms into this arena.