The “golden age” of infrastructure development is dawning in the Philippines, which promises to spur new opportunities for Hong Kong companies, according to Roderico C Atienza, Acting Consul General of the Philippines in Hong Kong.

“The history of business in Hong Kong has been dominated by deals with China,” Atienza said. “But recently we’ve seen a turn towards Southeast Asia,” he told members at the Chamber’s Belt and Road Series roundtable on 30 November.

He stressed the recently signed free trade agreement with ASEAN will make it easier for Hong Kong companies to work across the region. And in the Philippines itself, President Rodrigo Duterte’s ambitious “Build Build Build” programme complements China’s Belt and Road Initiative, where the Philippines is a key part of the maritime route.

“There has been a lot of talk about the Belt and Road Initiative,” Atienza said. “The grand plans of China overlap a lot with the plans of our government.”

The Acting Consul General was candid about some of the issues that have dogged his country, including the six-year presidential term limit.

“The Philippines has been doing quite well, but the problem has been that we’ve always been trapped in a boom and bust cycle depending on the presidency. With President Duterte, we seem to have broken away from this cycle.”

Duterte unveiled his “Build Build Build” program in April 2017, stressing he would continue and even revive projects introduced by former administrations. As part of this, the government intends to ramp up spending on infrastructure, from 5.4% of GDP to 7.4%.

Besides traditional government funding, official development assistance (ODA) financing is also key. Atienza pointed out that besides China, Japan is a major investor, while Russia, South Korea and Australia have also shown an interest in the Philippines.

The third method, and the one of strong interest to Hong Kong companies, is the public-private partnership model, which will ensure that the Philippines can benefit from the expertise of overseas companies.

Projects that Atienza highlighted included the NLEX-SLEX elevated highway in Metro Manila and a bus rapid transit system in Cebu. The telecoms infrastructure is also in need of an overhaul.

“We have to admit that the Philippines has one of the worst infrastructures for the Internet in the whole of the Southeast Asian region,” he said, but added that they were opening up the sector to a third and even fourth player.

A case study of how companies can get involved in these huge projects was provided by Nicholas Ho, Deputy Managing Director at hpa. This Hong Kong-based architecture firm won the tender to build the City of Pearl on reclaimed land in Manila Bay.

Ho’s company is experienced in transit-oriented development, creating mixed-use developments based around public transport. The City of Pearl – a 20-year project to build “a truly Asian metropolis” – fits into this model, and aims to create the first smart city in Southeast Asia.

It will be centred around a public park and golf course, and will include a business district with Grade A office space, government buildings, residential areas, healthcare facilities and a stadium.

He noted that since the end of 2016 there has been increasingly close collaboration between China and the Philippines. China’s investment in strategic and long-term projects in the Philippines provides a boost of confidence for private companies.

“Once people know infrastructure investment is happening, developers and individuals from Hong Kong will start going in,” he said.

Hong Kong’s experience in the development of Mainland China means that it is perfectly positioned to do the same in ASEAN, Ho said.

“A lot of Hong Kong companies have orchestrated the success of the China boom in the past 30 years – now the Belt and Road is opening up more opportunities to the world.”

Having done projects in several countries in Southeast Asia, “there are always risks,” Ho admitted. But on the positive side, he noted that the Philippine government is focused on transforming the economy.

“The Philippines has a lot of advantages,” Ho said. “The population is super young, their English is second only to Singapore in the region, and they are hard working. Regulations are restrictive, but they are actively being reviewed and Duterte is making efforts to liberate the market.”