DOF invites private sector to invest in sustainable surface water sources

Finance Secretary Ralph G. Recto has invited the private sector to invest in sustainable surface water sources to help address the Philippines’ decades-long water problem.

“The Marcos, Jr. administration recognizes the urgent need to address these challenges head-on. And we call upon the private sector to work together with us in forging sustainable solutions through investments in surface water sources,” said Department of Finance (DOF) Undersecretary for the Privatization and Corporate Affairs Group (PCAG) Catherine L. Fong who delivered the Secretary’s speech on his behalf at an investment forum on February 13, 2024.

The forum, which was co-sponsored by the Office of the President (OP), the Department of Environment and Natural Resources (DENR), the Department of Finance (DOF), and the Department of Agriculture (DA), in collaboration with the British Embassy in the Philippines, highlighted investment opportunities in innovative and long-term water solutions to enhance the country’s water security and power generation.

Secretary Recto assured investors of President Ferdinand R. Marcos, Jr.’s strong commitment to championing PPPs, as evidenced by the swift enactment of the PPP Code of the Philippines.

“Along with the amendments to the Public Service Act, the PPP code rolls out a red carpet to investors, offering a stable, predictable, and competitive environment where high-quality PPP investments can thrive,” he stressed.

The PPP Code leverages over three decades of experience with the Build-Operate-Transfer Law and integrates best practices to streamline processes, reduce transaction costs, and enhance the ease of doing business for PPPs.

The Implementing Rules and Regulations (IRR) of the law are in the final stages and shall be released very soon.

Secretary Recto briefed potential investors on investment prospects for PPPs under the President’s Build Better More program, which consists of 198 high-impact Infrastructure Flagship Projects (IFPs) worth PHP 8.8 trillion (about USD 155 billion).

Of the total, 44 projects focus on water resources with an indicative investment amount of PHP 839.2 billion (about USD 14 billion).

“I invite you to take a closer look at these projects and uncover the myriad of opportunities awaiting your partnership with us,” the Finance Secretary said.

To further strengthen the PPP environment in the country, the Department of Finance (DOF) has been refining the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act to better address investor concerns and tailor-fit incentives for more strategic investments.

On top of this, the DOF is also advocating for the passage of the Department of Water Resources Bill to harmonize water policies, programs, and projects and ensure the proper management and development thereof.

“At present, there are over 30 agencies with redundant roles managing the country’s water resources. Their overlapping functions result in disjointed planning and uneven policy execution. These ultimately impede the stability of the nation’s water supply,” the Finance Chief said.

The proposed department shall serve as the primary agency responsible for the comprehensive and integrated water resources development and management in the Philippines.

Beyond the country’s readiness to host partnerships through reform policies, Secretary Recto assured investors of the Philippines’ strong economic foundation, positioning it as the best place for investments.

“In the Philippines, we offer you an economy that is geared for a period of rapid expansion despite external headwinds,” he said.

In 2023, the Philippines was the strongest among major Asian economies with a gross domestic product expansion of 5.6%.

The country’s inflation rate has also been steadily declining, reaching 2.8% in January 2024, within the government’s target band of 2% to 4%.

In addition, the Philippines’ fiscal position remains strong and stable with its preliminary debt-to-GDP in 2023 declining to 60.2%, better than the 61.2% Medium-Term Fiscal Framework (MTFF) target.

In addition, the country’s labor market remains vibrant with the unemployment rate reaching a record-low of 3.1%.

“Clearly, now is the best time to do business with us. We invite the private sector to seize these opportunities eagerly awaiting at the table,” Secretary Recto stressed.

“Our collaboration will not only ensure water security. Above all, it will bring us faster and farther on the road to inclusive growth and a secure future for every Filipino,” he said in closing.