The main market of the city of Mandaluyong in Metro Manila was destroyed by a fire in 1991. The city government wanted to rebuild the market taking advantage of the new BOT Law in the country and became the first local government in the Philippines to do so. The winning bid for the Peso 300 million seven-storey market project came from Macro Founders and developers, Inc, a business consortium formed for this project. The bidder was awarded a BOT concession for 40 years to build, operate and manage the market. After the expiry of the concession period, the property would be handed back to the local government. The local government does not share any revenue generated by the project.
A number of commercial banks had provided short-term loans for the project. A long- term loan was provided by the Asian Financing and Investment Corporation (AFIC), a subsidiary of the Asian Development Bank. Macro Founders was able to negotiate with AFIC for a 10-year loan at concession rate. The project’s financing structure was as follows: equity,
25 per cent; advances from shops, 25 per cent; debt, 50 per cent. Most of the project risks were taken by the concessionaire.
The building of a new public market and shopping mall has benefited the community as a whole by providing long-term employment opportunities to locals, as well as improving living standards in this and neighbouring communities due to a new sewage facility.