Development Budget Coordination Committee estimated liabilities from PPP projects reached staggering P311.8 billion

Finance Secretary Carlos G. Dominguez III–DOF photo

Finance Secretary Carlos Dominguez III yesterday assured the public, that neither the government nor taxpayers, would be on the losing side in deals entered into with the private sector for big-ticket infrastructure projects.

According to the Inquirer, Dominguez told the House committee on ways and means on Monday that at the start of the Duterte administration, it reviewed the projects undertaken through the public-private partnership (PPP) mode, amid rising contingent liabilities.

“There is no such thing as ‘no cost to the government’— there is always a cost, and the cost is either borne by the government or by the taxpayer, or by the user of PPP projects”, Dominguez said.

Among these contingent liabilities are guarantees of revenue and of return of investment (ROI), which the government will shoulder, as well as fees and charges, which consumers will pay, the Finance chief noted.

While the PPP Center was still preparing a report on these contingent liabilities, Dominguez said that “we were quite surprised with the amount of liabilities that these so-called PPP projects in the past had generated.”

The Development Budget Coordination Committee (DBCC) had estimated contingent liabilities arising from PPP projects to have reached P311.8 billion last year.

For the PPP projects awarded during the current administration, Dominguez said the liabilities had been “limited” to not burden the government and users.

Recent report

This comes after a press report last week, that Pharmally Pharmaceutical Corp. received government contracts worth over P8.6 billion in 2020 despite being only several months old and having just P625,000 in paid-up capital.

Dominguez also cited the airport and water utility PPPs in New Clark City, which he claimed had “totally different” contracts compared with previous deals entered by the government.

The Finance chief said the Clark water contract, for instance, was unlike those with Manila Water and Maynilad, which the government reviewed and renegotiated for allegedly being “onerous”.

The Clark International Airport expansion was also “much better in terms of contingent liability management than the PPP project that was done for the airport in Cebu,” Dominguez added.

The updated list of flagship infrastructure projects in the “Build, Build, Build” pipeline included 20 unsolicited PPP projects worth P1.5 trillion, which will be financed by tycoons’ deep pockets.