The National Development Co. (NDC), the government’s investment arm, has deferred plan for a P3-billion bond float this year as the government is shying away from granting sovereign guarantee.
"We are going back to the drawing board," NDC general manager Arthur N. Aguilar saying they have to determine which projects will be affected or delayed as there will be not enough funds to bankroll some of its projects.
Aguilar, however, said NDC will still have to get a confirmation from the Department of Finance if it now an official policy of the government not to grant sovereign guarantees due to the country’s fiscal situation.
Foreign investors, however, are expected to ask for a sovereign guarantee making the float difficult.
"In that case, we will be working on our own resources," Aguilar said.
So far, Aguilar said, NDC still has
P2 billion fund from the Agri-Agra fund.
Previously, NDC was confident of raising
P8 billion as its equity on vital infrastructure projects under the Philippine Infrastructure Corp. (PIC).
Originally, the NDC plans to raise the
P8 billion through P5 billion long-term peso denominated bond float and the remaining P3 billion would come from the sale of real estate assets.
The NDC through the Philippine Infrastructure Corp. (PIC) has an estimated financing requirement of
P100 billion within six years to bankroll preidentified viable high impact infrastructure projects.
Some of these projects include the South Luzon expressway rehabilitation; the C-6 Calabarzon expressway; North Luzon east expressway; TarlacPangasinan-La Union expressway; Laguindingan/Mindanao airport cluster; Busuanga airport; cold storage network and the power aggregate corporation.
Trade and Industry Secretary Peter B. Favila, who is also chair of the NDC Board, had already made his position clear that DTI will not endorse nor recommend any request for sovereign guarantee.
"Our friends from overseas should understand this because they’re the ones saying we should put our fiscal house in order," he said.
Favila then proposed to tap the mandatory banks’ loan allocation for AgriAgra projects.
"We better get a slice of the banks’ Agri-Agra fund after all the funds only are also spent in schools and bridges construction," he said.
For compliance purposes of the Agri-Agra law, which requires banks to allocate 25 percent of its total loan portfolio for Agri-Agra projects, banks normally used the fund to buy Treasury Bills.
Favila said that proceeds from the purchase of T-bills should now be specifically approved for Agri-Agra infrastructure projects because the fund just got lost in the national budget.
While the agri-agra fund should not be used for infrastructure projects, Favila said it is useless if there are no roads leading to these agricultural projects. (BCM)
Favila said the re-allocation of the bank’s AgriAgri funds for infrastructure projects would need a minor amendment of the law.
"I think the banks will agree because this is neutral to them," he said.
Favila said he has yet to determine the total available fund from the banks’Agri-Agra fund allocation. (BCM)
