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Philippines: North Luzon Expressway Rehabilitation and Expansion Project

| country: Philippines

(a) Toll increases and the expanded value added tax negatively impacted financial performance.
It would have been preferable to include a capacity charge in the tariff formula, and possibly even to use the Private Finance Initiative (PFI) model in which traffic revenues are decoupled from payments to the project company.

(b) Debt servicing might not have been a problem at the time the Extended Annual Review Report (XARR) was prepared due to the improvement in the peso’s standing vis-a?-vis the dollar, but as recent developments show, currency rates can be highly volatile and must be constantly monitored.

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