MANILA - The Philippines plans to allow overseas companies to build infrastructure worth at least US$1 billion (32.5 billion baht) as the nation doubles spending on roads, ports and bridges to bolster its tourism and farm sectors, Public Works Secretary Rogelio Singson said.
Licences can be issued to foreign contractors that will pledge investments, with estimates placing the requirement at as much as $1 billion in the form of equity and equipment, Mr Singson said.
Currently, foreign builders apply for a special permit per project.
''We have a bigger pie for everyone,'' Mr Singson said. ''I need more contractors. Opening it up to foreign players, provided the field is even, will increase competition, improve efficiency and result in better prices for government.''
The Southeast Asian nation, lagging neighbours from Malaysia to Thailand in infrastructure spending, is targeting 404 billion pesos (300 billion baht) worth of projects this year, or twice the amount it spent in 2011, helped by higher tax revenue and savings on public works due to reduced corruption, Mr Singson said. By 2016, spending on infrastructure should double to 824 billion pesos, or 5% of gross domestic product.
Since the start of President Benigno Aquino's term in 2010 to March this year, the Department of Public Works and Highways has accumulated about 26 billion pesos in savings after curbing corruption, Mr Singson said. Savings may rise a further 10 billion pesos in the next two years, which will help fund 2,000 kilometres of farm-to-market roads estimated to cost about 12 billion pesos, he said.
Foreign companies can augment the capacity of a handful of local contractors able to take on big projects, Mr Singson said, adding that rules may be finalised this year and implemented next year, in time for the planned integration of Asean economies. The government is also looking to increase opportunities for local firms in the Asean market by drawing up a common registry for builders in the region, he said.
''There are opportunities here for growth and that should attract foreign builders,'' said Jomar Lacson, head of research at Campos Lanuza & Co in Manila. ''The risks are equally great, so it depends on whether the government can guarantee stability as far as the rules are concerned. Foreign ownership limits may also be a factor.''
The Philippines has been opening up infrastructure to foreign companies as Mr Aquino oversees an economic revival that led to GDP growth of 7.2% last year, quickening from 6.8% the year before.
The department has completed about 67% of a 54 billion-peso programme to build 2,000 kilometres of roads to beaches, mountains and other areas earmarked for tourism, Mr Singson said. Tourism will account for 10% of Philippine GDP by 2016 from 7% now, Tourism Secretary Ramon Jimenez said in a separate interview.
Annual revenue from tourism has increased to about $4.7 billion from less than $3 billion before Mr Aquino's term, Mr Jimenez said. It has ballooned into a serious industry, he said.