"The government is cash-strapped. We are thus determining which projects can be realistically implemented during the six-year period of the current administration," Philippine Ports Authority (PPA) general manager Juan Pena said.
Pena was appointed last July to head the PPA which has the dual role of managing the state port system and regulating the country's port sector. He admitted that the Philippines will have to scale down its country-wide port development plan because of fiscal problems brought about by the Asian currency crisis.
The PPA had initially expected to spend about $2.2 bn for port infrastructure this year. Following the depreciation of the peso, it is estimated that it would now cost $4.4 bn to implement this year's port development plans. With the government facing a budget deficit of $932 million by the end of the year, it is unlikely that any more funds will be channelled into the sector.
Because of limited funds, the PPA is now determining which among the many waterfront port projects will be prioritised for development work. The original 25-year port modernisation plan called for the development of seven international ports, the building of a series of ferry ports along the Pan-Philippine highway and the creation of a nation-wide network of modern domestic ports to be linked through a hub and spokes system.
The plan is undergoing a major revamp, however. Priority is being given to projects in which funding is already in place and those ports which are experiencing sharp increases in cargo throughput. The port agency has so far decided to give priority to the upgrading of two Port of Manila terminals and the development of four provincial ports into international ports.
At the port of Manila, the South Harbour international terminal and the domestic North Harbour terminal will be expanded. Asian Terminals, which has a 25-year contract for the management of South Harbour, will be funding much of the upgrading. Privatisation of the country's premier domestic terminal, the North Harbour, will be pushed through to enable private sector port developers to participate in the project.
The provincial ports being upgraded included the Port of Batangas which is being developed as an alternative international port to Manila and the ports of Cagayan de Oro, Davao and General Santos City in the island of Mindanao.
The Port of Batangas project is being developed to serve as an alternate international port to Manila, while the ports in Mindanao have been experiencing rapid growth due to growing trade between Mindanao and the neighbouring countries of Indonesia, Brunei and Malaysia.
To meet demand, the PPA will construct additional berthing spaces, piers, and container handling facilities at the ports of Davao and General Santos City. The port of Cagayan de Oro will be expanded to include a grains terminal, fertiliser bulk terminal and a new passenger terminal.