Philippines Grains Central Public Private Partnership Project 2012-2013

The Philippines Grains Central Project was developed with the idea of bringing together the public and private sectors in a business venture that involves corn processing and trading. Through a Public Private Partnership (PPP) scheme, the project aims to strengthen the corn sub-sector by improving the operations of Post Harvest Processing and Trade Centers (PHPTCs) across the country. Well-designed and efficiently managed PHPTCs will improve the post harvest supply chain for corn – reduce post harvest losses, improve the marketability of the commodity and reduce reliance on its importation. This should ultimately improve the socio-economic well-being of the country’s corn farmers and help the agricultural sector become more competitive.  

The Department of Agriculture through the National Agribusiness Corporation is the proponent of this PPP scheme. It contracted the services of the Land Bank of the Philippines and the International Finance Corporation (IFC) to provide advice on the preparation and design of the project. The IFC in turn tapped the Aurecon Global Consulting and Orient Integrated Development Consultants, Incorporated (OIDCI) to undertake an in-depth technical due diligence based on a preliminary business case to identify major operational, technical, economic, financial, environmental, and legal issues that would impact on the options for structuring the PPP transaction. The due diligence, done on five work streams, will determine whether a viable project scope can be defined for the PHPTCs.

OIDCI’s assignment focused on the infrastructure review, financial modeling and economic analysis. This entailed an assessment of the technical and technological aspects of the operations of existing PHPTCs located in Pangasinan, Ilocos Sur, Isabela, Quirino, Camarines Sur, South Cotabato, North Cotabato, Sarangani, Bukidnon and Agusan del Sur covering the whole grain processing practices in the centers from receiving, handling, drying, bagging, storage, and transport. The financial model for the whole processing chain was reviewed and an economic analysis of the project’s desirability in terms of national economic and social net contribution was undertaken. In support of this assignment, OIDCI organized a mini-survey of corn farmers and PHPTC operators in 11 sites. The survey generated facility-level data that became the basis for refining the financial model and building the economic analysis.