According to banking giant UBS, the launch of additional infrastructure projects involving the private sector is forecast to boost growth.

Big-ticket public-private partnership (PPP) projects, such as the rehabilitation of the Ninoy Aquino International Airport, are a key source of growth, says UBS Asia economist Grace Lim.

“A potential upside is if some of these plans to engage the private sector in PPPs come through more quickly. In that sense, we believe that it is possible that investment could also pick up,” Lim stated.

Within the government’s flagship infrastructure program, there are 74 ongoing projects with a combined cost of P4.13 trillion, The Philippine Star reports.

Furthermore, there are 40 projects costing P2.25 trillion that are being executed via PPP alone, whilst 11 additional projects worth P279 billion will be funded via PPP and others.

“Most of these projects will be completed beyond 2028 so that is not something that will all come through in just one year. But there are some ongoing projects worth about P300 billion targeted for completion by the end of this year,” Lim said.

“When it comes to this kind of large-scale investment, when it starts breaking ground and when it starts adding to GDP via the investment route, it tends to be rather spread out,” she added.

Launching PPP projects could also bolster loan growth demand, which is forecast to increase marginally above 10% this year.

The government is also allocating 5.1% of GDP, or around P1.365 trillion to infrastructure spending in 2024.

Moreover, the UBS Asia economist also forecasts increased government spending this year, following subdued spending last year.

“We think that government consumption growth will accelerate modestly in 2024. Our forecast is about a 7-8% increase year-on-year,” Lim said.