By Riza Lozada
Multilateral lender Asian Development Bank (ADB) recently approved a $100 million loan to set up systems that will speed up the country’s infrastructure buildup.
The project called Infrastructure Preparation and Innovation Facility (IPIF) will accelerate the delivery of high quality public infrastructure projects under its ambitious “Build, Build, Build” program, ADB said in a statement.
The facility will assist the Department of Transportation (DoTr) and the Department of Public Works and Highways (DPWH) in preparing flagship infrastructure projects under the Build, Build, Build program using international best practices.
In all, it is estimated to spur $3.8 billion or P1.9 trillion in public infrastructure investments in national roads, railways, bridges, flood control, ports, and airports, which in turn will add as much as $10 billion P5 trillion to the country’s gross domestic product (GDP) between 2019 and 2024.
“The flagship infrastructure projects under the ‘Build, Build, Build’ program will spur economic growth and improve people’s living standards. Better infrastructure will lower the cost of doing business, shorten travel times, and usher in more economic opportunities in remote areas. It will also make it easier for people to access education, healthcare, and other social services,” Richard Bolt, ADB Country Director for the Philippines, said.
“We look forward to working with the government to develop a timely, high-quality project preparation process for effective, innovative infrastructure projects in the Philippines,” he added.
The Build, Build, Build program, the centerpiece of President Duterte’s 10-point Socioeconomic Agenda, aims to increase public investment and accelerate infrastructure delivery. Public spending on infrastructure is expected to reach 7.4 percent of GDP by 2022, up from 5.3 percent in 2017 and less than three percent from 2010 to 2016.
The new loan, along with the recently approved $5 million (P250 million) technical assistance grant, serves as a catalyst for the government’s project management and monitoring system. It will strengthen the government’s project facilitation and monitoring systems, reduce infrastructure bottlenecks, and help relevant agencies systematically monitor project progress and address operational issues at every stage of project planning, construction, and operation.
The new facility builds upon ADB’s experience in supporting the Public-Private Partnership (PPP) Center for the Philippines, which has boosted the government’s ability to identify, finance, and implement PPP projects.
The total cost of the facility is $164.06 million or P8.2 billion, with the government contributing $64.06 million or P3.2 billion. The project is expected to be completed in the second quarter of 2021.
The funding is ADB’s first technical assistance loan for the Philippine government. It will help DPWH and DOTr prepare projects such as complex road networks, long-span bridges, flood control and urban water systems, and crucial public transport, port, airport, and railway investments.
These projects are part of the “Build, Build, Build” program involving $160 billion to $180 billion in infrastructure spending until 2022 to boost economic growth by improving access to markets and business opportunities across the country.
The IPIF will support only a small slice of the country’s huge infrastructure investment needs.
But the facility will allow the government to accelerate project implementation and bring in international expertise and innovative practices in undertaking sophisticated, large-scale projects.
“The IPIF will set a good working business model on how we can speed up infrastructure projects without compromising quality,” Rolando Tungpalan, Undersecretary for Investment Programming at the National Economic and Development Authority (NEDA) said.
“It will also set the stage for reforming our processes, our rules, and at the same time build capacity that hopefully will permeate to the larger bureaucracy,” he added.
The timely mobilization of high-quality consulting services is critical to reducing project approval and start-up times.
Consultants will be selected using ADB’s rigorous international competitive bidding process and will work hand in hand with implementing agencies to prepare projects. This close collaboration will bring expert advice and international best practice to government agencies, and introduce innovation in project implementation.
Under the facility, project management units responsible for day-to-day management of project outputs will be created at the DPWH and DOTr. The units will be headed by department undersecretaries and will lead project preparation, monitor project implementation, conduct quality assurance checks, and review consultants’ outputs.
The government has identified an initial list of priority projects to be supported under the facility.
An ongoing $5 million technical assistance grant is helping the government recruit experts for these projects and strengthen project management and monitoring systems in implementing agencies.
“The seriousness and dedication with which the government has taken this BBB program is really commendable,” Bolt said.
“ADB is committed to boosting the Philippines’ capacity in preparing these
projects and managing the risks to help ensure Filipinos across the archipelago benefit from the country’s strong growth,” he added.
The IPIF builds on ADB’s experience in supporting the government’s effort to restructure the Public-Private Partnership (PPP) Center for the Philippines in 2011.
The bank also helped the government set up a project development and monitoring facility, which provided assistance in identifying, developing, and financing bankable PPP projects.
“Proper infrastructure allows people access to work, markets, education, health care, housing, and other services that will lift their standards of living.
It also boosts business potential and economic opportunities especially in rapidly growing areas. This project will help the Philippines realize its potential and remain competitive,” said James Leather, ADB Principal Transport Specialist.