Philippines Infrastructure Report Q2 2010

The Philippines has released 2009 annual data for thewith Metropolitan Bank & Trust (Metrobank).
construction industry, illustrating that the country'sAlso in the energy sector this quarter, was news
construction industry weathered the economic stormthat the Philippines might finally get nuclear electricity
quite well. Construction industry real growth for thegenerated within its borders. Korea South East Power
year came in at 5.8% year-on-year (y-o-y), to reachCompany (Kepco) and an unnamed French company
a value of PHP378.67bn (US$8.21bn). Although thisexpressed interest in building a nuclear power plant in
does represent a slow down from 2008 growththe country in February 2010. The plans include
levels, of 7.8%, it is strong growth considering theconstruction of a 600 megawatt (MW) - 800MW
economic climate.power plant which could be completed by 2025. The
In 2010, we are expecting growth to return to 2008Philippines already has a nuclear power plant which
levels. One key area driving growth will be renewablewas completed in 1984; however, it was mothballed
energy. With the government's Renewable Energybefore even being commissioned due to a number of
Act (passed in December 2008) the Philippinessafety concerns. Both types of investment will help
renewable energy sector has become very attractiveto ease the crippling power shortages that have
to investors. The area has been identified as abeen plaguing the Philippines for some time.
growth opportunity by a number of domestic banksIn the transport sector, a joint venture of Metro
as well. Banco de Oro (BDO) is the latest PhilippinePacific Investment Corporation and Harbour Centre
bank to team up with the International FinancePort Terminal Inc signed a contract for a concession
Corporation (IFC), which will provide the bank withto operate the Manila North Harbour. The company
advise on financing renewable energy projects. Thewill invest US$311mn to modernise and expand the
agreement follows a similar one between IFC andport and will operate it for 25 years.
Bank of the Philippine Islands (BPI), and before that