Standard Chartered Bank has expressed interest in providing financial and technical assistance to the Philippines in implementing the proposed railway system in Mindanao under the Duterte administration’s ambitious “Build, Build, Build” infrastructure program.
In a recent meeting with Finance Secretary Carlos Dominguez III, Standard Chartered officials also offered their bank’s services in facilitating the conversion of the Development Bank of the Philippines (DBP) into the country’s infrastructure bank.
Dominguez and these bank officials also discussed the Philippines’ plan to sell Chinese renminbi-denominated Panda bonds this year, the Duterte administration’s proposed Comprehensive Tax Reform Program (CTRP) and national ID system, the rehabilitation of the Agus hydropower plants in Mindanao, and the possibility of offering green bonds and project bonds to help finance the country’s infra buildup.
“There are five projects approved by the National Economic and Development Authority (NEDA), and the largest is the railway in Mindanao. We want to see how we can help there. We also want to clarify how we can help closely DBP as an infra bank – putting up an infra fund, or providing advisory [services],” Lynette Ortiz, the CEO and Country Head of the Bank’s Global Banking division for the Philippines, said during that meeting.
Ortiz also mentioned that Standard Chartered “has been helping DBP for their funding.”
In response, Dominguez cited four major rail projects under the Duterte administration’s unprecedented infrastructure plan. These include the Manila-Clark commuter railway project that is expected to commence between October and December this year; the proposed Mega Manila Subway, with its first phase running from the Ninoy Aquino International Airport to Quezon City; the Calamba-Bicol railway; the MRT 7 project from Manila to Bulacan, and the first stage of the Mindanao Railway project connecting the cities of Digos in Davao del Sur and Tagum in Davao del Norte.
“The whole idea is we believe we’re so far behind our neighbors on infrastructure, and it just makes sense to spend money on it. But we’re not going do it like how they did it in the past. Doing it through PPP (Public-Private Partnership) takes so much time. Our administration is willing to start the projects, and outsource the operations and maintenance later. It will allow people who are averse to take the construction risks to come in,” Dominguez said.
As for Standard Chartered’s offer to assist the DBP, Dominguez said: “We’d really like to partner with you on this. [DBP president and CEO] Cecille [Borromeo] will welcome working with you, especially with your experience in Asia.”
Anna Marrs, the bank’s regional CEO for Southeast Asia, described the Duterte administration’s infra plan as an “ambitious agenda,” but said the government “might as well achieve it.”
Nirukt Sapru, the Bank’s CEO for Vietnam and the South East Asia Cluster Markets, also joined the meeting.
Dominguez also informed them that the government intends to rehabilitate the Agus hydropower complex in Mindanao to ensure the island’s energy security.
“We’ll rehabilitate those, and bid out their operations and maintenance. That will be a few years down the road. But this is the time to do it, because we have excess power in Mindanao at the moment,” Dominguez said.
Dominguez said the government’s massive infrastructure program could lead to a shortage of manpower and skills owing to the large labor demand for the projects. But he told the bank’s officials that the government is counting on overseas Filipino workers scattered across the globe to return home and help in implementing these projects.
The Duterte administration’s proposed CTRP will, in turn, help fund the government’s accelerated spending not only on infrastructure, but also on education, health and social protection for the poor, Dominguez said.
Dominguez noted that the CTRP’s first package—House Bill 5636 or the Tax Reform for Acceleration and Inclusion Act, (TRAIN)—will also simplify the tax system and make it more progressive.
