Tuesday, 20 January 2009

PCCI may drop stimulus plan

BY JESSICA ANNE D. HERMOSA, Reporter
BusinessWorld Online
http://www.bworldonline.com/BW012009/content.php?id=001

PRIVATE SECTOR PROPONENTS of a P100-billion stimulus may abandon the effort if they and the government cannot settle the matter of which agency will handle the funds and if projects do not begin within the first half of the year.

The plan will no longer effectively pump-prime the economy if implemented too late in the year, officials of the Philippine Chamber of Commerce and Industry (PCCI) yesterday said.

The PCCI, the country’s largest business group, proposed the fund late last year, in which government financial institutions will shoulder half of the P100 billion while private banks will lend the remainder.

National Development Corp. (NDC) had been tagged as the disbursing agency as it is authorized by its charter to do so. The state-owned company, however, has refused to guarantee the private banks’ contributions, a condition urged by the private sector.

"If [NDC chairman and Trade Secretary Peter B. Favila] insists [on no guarantee], then I will have to tell the President [Gloria Macapagal-Arroyo] that we cannot do this ... We have no other vehicle we can use," PCCI Chairman Emeritus Donald G. Dee told a meeting of the group’s infrastructure committee.

"And if it lapses after two months, it will become less of an interest because pump-priming should be done early," he added.

PCCI President Edgardo G. Lacson echoed this, telling the meeting: "This plan is strictly time-bound. We have to be on the ground by the first half. If not, we will have to surrender. We tried."

Mr. Favila was not immediately available for comment. He has said guarantees would be issued only for select projects.

Still also to be settled is the issue of the expropriation of land where the planned infrastructure projects will be located.

The Budget department also cannot allot funds because the total amount needed is not yet clear, infrastructure committee chairman Enrico L. Basilio said. A writ of possession, which is needed for construction to start, also cannot be acquired until payment for the land has been deposited, he added.

Meanwhile some of the projects which may be funded, such as the C-6 highway from Bicutan to Meycauyan, still have to undergo feasibility studies and National Economic and Development Authority (NEDA) screening, Public Works department director Bien Venida Firmalino said.

As a solution, the PCCI is considering projects that have already gained approval from the NEDA Investment Coordination Committee but have been earmarked for funding by overseas development aid (ODA).

"We will ask agencies to submit a list of ... approved projects without funding or have a stalled ODA loan," Mr. Basilio said.

No projects were officially identified yesterday for prioritizing but the C-6, an expressway from Skyway 1 to the North Luzon Expressway, a "grand central station" on North Avenue and EDSA, and the extension of LRT Line 1 southward were again mentioned by Messrs. Dee and Basilio.

While negotiations on which agency will handle the fund are ongoing, the public and private sector Pro-performance Systems Steering Committee (PPSSC) will be given a list of possible projects so it can start resolving right-of-way issues, Mr. Basilio said.

The PPSSC monitors the progress of infrastructure projects which Mrs. Arroyo has pledged to fulfill.

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