UK launches British Investment Partnerships for sustainable development in PH

The United Kingdom (UK) Government launched its British Investment Partnerships (BIP) to finance sustainable development in the Philippines on March 30, 2023 at The Peninsula Manila.

“Today’s event is a major win not only in the Philippines’ development journey, but in the realm of development finance as a whole,” Finance Secretary Benjamin Diokno said in his remarks.

The UK has been a strategic development partner of the Philippines for nearly 80 years and has supported the country when it launched its first-ever Sustainable Finance Roadmap in 2021.

Now, through the BIP, the UK Government aims to deepen economic, security and development ties globally, while delivering jobs and growth in both the UK and in developing countries.

The UK intends to mobilize up to £8 billion of financing a year by 2025, including from the private sector. Investments will focus on high-impact target areas such as green infrastructure, clean technology, and climate finance.

“Through the British Investment Partnerships, the UK Government sets out to deliver real change in the modern, post-pandemic world,” Secretary Diokno said.

Infrastructure is a top priority of the Marcos Jr. administration in the next five years and is reflected in the 8-Point Socioeconomic Agenda, the Medium-Term Fiscal Framework (MTFF), as well as the Philippine Development Plan (PDP) 2023-2028.

According to Secretary Diokno, investments in infrastructure have the highest impact on the economy as it creates more quality and green jobs, encourages more businesses to open, and improves the ease of doing business.

“For far too long, infrastructure in the Philippines has languished on the back burner of national government spending. From 2001 to 2014, average infrastructure spending was only at 2 percent of GDP [gross domestic product],” Secretary Diokno said.

According to him, the Philippines only recognized the urgency of building up its infrastructure portfolio in 2016––referring to it as the ‘Golden Age of Infrastructure’.

The current administration is determined to build on the previous administration’s infrastructure push and maintain high infrastructure spending at 5 to 6 percent of GDP from 2023 to 2028.

To finance this, the government will seek support from the private sector through the public-private partnership (PPP) mechanism to address cross-cutting issues such as a weak competition environment and the widening digital divide.

The Build-Operate-Transfer (BOT) Law’s Implementing Rules and Regulations (IRR) were recently revised to make PPPs more efficient. The revisions were made to reflect best investment policies and practices, as well as address stakeholder concerns on the financial viability and bankability of PPP projects.

Apart from this, the government also revised in December 2022 the Investment Coordination Committee (ICC) Guidelines on PPP approvals to ensure faster processing and approvals of PPP projects.

In March 2023, the NEDA Joint Venture (JV) Guidelines were revised to enhance competition for projects under JVs, improve the performance of private-sector participants, and strengthen checks and balances to ensure that projects are technically and financially sound.

Secretary Diokno stressed the significance of the reforms, saying, “All these changes add up to an effective framework under which investments can be safely done without delays due to inadequate oversight or poor management practices during the implementation stage.”

Now that the government has provided a more competitive and enabling environment for PPPs to flourish, it is expecting an expeditious roll-out of big-ticket projects to enhance the Build, Better, More infrastructure program.

President Marcos, Jr. has already approved through the National Economic and Development Authority (NEDA) Board 194 high-impact Infrastructure Flagship Projects (IFPs) that target physical and digital connectivity, green and blue projects, countryside development, energy, and health.

“The launch of British Investment Partnerships here in the Philippines has come at the best possible time. We are revving our engines to steer the Philippine economy back to its high-growth trajectory,” Secretary Diokno said in closing.

Her Excellency Laure Beaufils (British Ambassador to the Philippines), Right Honourable Anne-Marie Trevelyan (UK Minister to the Indo-Pacific), and Mr. Edgar Chua (Chairman of the Makati Business Club) attended the launch.