No risk mgt fund yet for PPP projects By Cai U. Ordinario
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WO years after the Public Private Partnership (PPP) law was enacted, the government has yet to create a risk management fund (RMF) for the payment of contingent liabilities arising from PPP projects. PPP Center Deputy Executive Director Eleazar Ricote recently told reporters that the fund is still being crafted, consistent with the provisions of the PPP Law. Under Section 27 of Republic Act No. 11966 or the Public-Private Partnership (PPP) Code of the Philippines, the government
institutionalized the creation of the RMF, which will be managed by the PPP Center. “I don’t have the exact timeline [on when it will be set up], but I know it’s being put together, yes,” Ricote told reporters. “”Hopefully no [project will need it].” Under the law, the PPP RMF will be financed by general appropriations; income from existing PPP Projects; and other sources as may be determined by the Development Budget Coordination Committee (DBCC). The law stated that the PPP Center and the Inter-Agency Technical Working Group will draft the guidelines for the management of
Contingent Liabilities from PPPs that will be subject to approval by the DBCC. “The Inter-Agency Technical Working Group on Contingent Liabilities created under the DBCC Resolution No. 2015-2 is hereby institutionalized,” the law stated. Contingent liabilities include but are not limited to government guarantees extended by the national government and stateowned enterprises when undertaking projects and programs with development partners, including private firms. Based on the Fiscal Risks Statement 2025, a total of 47 PPP contracts are being monitored and
have a combined project cost, the estimated cost at project approval, of P1.84 trillion. The DBCC report also said 37 out of the 47 PPP contracts have a total foreseeable and definite liabilities amounting to at least P406.3 billion over the life of the contracts. “The P0.03-billion increase from the previous report is due to the addition of information on approved variation works, recently submitted by the IAs to the PPP Center. Of the total amount of foreseeable and definite liabilities, at least P171.41 billion has been confirmed paid,” the report stated. See “Risk,” A2
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Tuesday, August 19, 2025 Vol. 20 No. 310
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By Cai U. Ordinario
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HE recovery of the country’s current account balance could be made more difficult given global headwinds, according to United Kingdom-based think tank. In its latest economic note, BMI, a Fitch Solutions Company, noted that the country’s current account deficit widened to 3.7 percent of GDP in the first quarter 2025 from the 1.9 percent in the same period last year. BMI said this current account deficit is expected to continue in the medium term. The deficit is projected to average 2.8 percent of GDP in the next three years, significantly faster than the 0.4-percent average between 2015 and 2019. “The Philippine external sector is set to come under pressure over the medium term as global trade headwinds mount. Consequently, we are forecasting wider current account deficits over the medium term compared to its historical average,” BMI said. “We now expect the Philippines’s external position to deteriorate as trade See “Current,” A2
FLOODED WITH QUESTIONS An unfinished section of a flood control project lies idle along the Pampanga River in Barangay Bulusan, Calumpit, Bulacan, on Monday, August 18, 2025. The stalled project reflects the growing controversy after President Ferdinand Marcos Jr. flagged irregularities in Bulacan’s flood control works during his recent inspection. In response, the Commission on Audit (COA) has launched a fraud audit into multibillion-peso projects of the Department of Public Works and Highways (DPWH), while the Senate Blue Ribbon Committee is set to open its probe on Tuesday. NONOY LACZA
CHINA TO LAUNCH FIRST FREE TRADE PORT IN HAINAN BY DEC By Malou Talosig-Bartolome
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AINAN, China—China is set to transform Hainan into its first official free trade port (FTP), granting the southernmost island province greater autonomy over trade and investment policies. “The Hainan FTP will officially commence island-wide customs operations on December 18 this year,” said Wang Bin, member of the Standing Committee of the Hainan Provincial Party Committee and Minister of the Publicity Department, during a briefing with Asean journalists.
This marks China’s first official free trade port, distinct from Hong Kong, which operates like a free port but lacks formal designation. Unlike China’s existing free trade zones in Shanghai, Fujian, Chongqing and Beijing—where the Communist Party maintains strict oversight—Hainan’s FTP status allows for more liberalized policies. Key features include: • Zero tariffs on imported goods for production • A low-tax regime with simplified systems See “China,” A2
Insurance profits steady as of Q2 2025 By Reine Juvierre S. Alberto
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HE country’s insurance industry continued to post higher profits as of the second quarter of this year, driven by higher premiums that also improved insurance penetration. Latest data from the Insurance Commission (IC) showed total net income of the insurance industry grew to P28.78 billion as of the second quarter of 2025. Earnings of life and non-life insurers, including mutual benefit associations (MBAs), increased by 3.62 percent from P27.77 billion in the same period a year ago. This comes after total premiums paid amounted to P242.84 billion,
up by 12.98 percent year-on-year from P214.94 billion. Broken down, insurance premiums paid for life insurance products rose by 12.01 percent to P195.05 billion from last year’s P174.13 billion. The bulk of these premiums was collected from variable life insurance products. Net premiums written from nonlife insurance products also totaled P39.63 billion, higher by 20.48 percent from P32.89 billion. In addition, contributions to MBAs went up by 3.09 percent to P8.16 billion from P7.91 billion a year ago. As such, the average spending of each individual on insurance increased by 12.07 percent as of the second quarter, as insurance den-
the 1.89 percent posted in the first quarter of this year.
Benefit payments
sity amounted to P2,137.32.
Insurance penetration
INSURANCE penetration, or the contribution of the insurance sector to the national economy, stood at 1.79 percent in the second quarter of this year. This slightly improved from the 1.71 percent recorded in the same period last year, but declined from
MEANWHILE, the insurance industry shelled out P77.57 billion for benefit payments as of the second quarter of this year. This increased by 1.18 percent from P76.67 billion in the same period a year ago. Moreover, the combined assets of the entire insurance industry reached P2.542 trillion as of the second quarter, a 7.56-percent increase year-on-year from P2.363 trillion. Liabilities also grew by 7.29 percent year-on-year to P2.048 trillion, while net worth rose by 8.70 percent to P493.762 billion.
PESO EXCHANGE RATES n US 57.1450 n JAPAN 0.3884 n UK 77.5801 n HK 7.3022 n CHINA 7.9555 n SINGAPORE 44.5680 n AUSTRALIA 37.1900 n EU 66.9511 n KOREA 0.0411 n SAUDI ARABIA 15.2293 Source: BSP (August 18, 2025)