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PhilStar Business

DA eyes PPP for P80 billion farm-to-market roads

The Department of Agriculture (DA) is looking to place about P80 billion worth of farm-to-market roads (FMR) under public-private partnership (PPP) to hasten the construction of farm roads in rural areas.

Context & Analysis

Farm-to-market roads have long been the unglamorous bottleneck of Philippine agriculture. A farmer in Bukidnon may grow excellent pineapples, but if the only route to the collection point turns to mud during the rainy season, that harvest either rots in the field or reaches the market at a fraction of its potential value. Post-harvest losses in the country remain stubbornly high across several key commodities, and inadequate farm roads are consistently cited as a primary culprit. The move to channel P80 billion into these roads through public-private partnerships signals that the Department of Agriculture recognizes the problem is no longer one of budget allocation alone but of delivery speed.

For businesses, the implications ripple outward. Food is a dominant weight in the country's consumer price index, and transport costs tied to poor rural connectivity feed directly into retail prices. A more efficient FMR network could ease cost pressures on food processors, distributors, and ultimately consumers, giving the Bangko Sentral ng Pilipinas less of a food-inflation headache to manage. For investors, the question is whether these projects can be structured attractably. Farm roads are typically short, scattered, and low-revenue — the opposite of the long-span highways or bridges that have historically drawn private capital under the Build-Operate-Transfer framework. The viability of this scheme likely depends on bundling dozens of small projects into larger packages or relying on government availability payments rather than user fees, both of which carry their own risks for fiscal discipline.

What to watch next is the mechanics. The PPP Center, which screens and approves all such proposals, will need to evaluate whether the DA has a credible pipeline of projects ready for procurement or whether this remains a policy aspiration for now. The revenue and risk-sharing model will tell the real story: if the government ends up backstopping most of the financial risk, the "private" in public-private partnership becomes largely nominal. Filipino business owners in logistics, cold-chain services, and agribusiness should track how quickly feasibility studies move, because the timeline between announcement and shovels-in-the-ground has historically been the biggest gap in Philippine infrastructure.

Analysis by IJE Software — original commentary on the story above.

This is an excerpt. Read the full article at the original source:

Source: philstar.com

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