Biggest infra buildup in the Philippines to cost P900B

By Luis Leoncio

The administration’s planned infrastructure spending would be the biggest in terms of its share to total economic output since the term of former President Ferdi­nand E. Marcos in 1969, the Depart­ment of Public Works and Highways (DPWH) said.

President Duterte has commit­ted to spend 5.4 percent of the Philip­pines’ gross domestic product (GDP) in infrastructure, or a total of P900 billion, under his term.

Finance Secretary Carlos Dominguez III said loan pledges from China amounting to $6 billion (P282 billion) of official development assis­tance (ODA) and $3 billion (P141 billion) in commercial loans will back up the massive government infra­structure offensive. The figure is the highest in the last 47 years and un­precedented in past administrations.

Public Works Secretary Mark Villar said priority projects in the infrastructure build up are the Sta. Monica–Lawton–BGC Link Road Project, a 1.15-kilometer bridge, roadway and viaduct structure that will connect Lawton Avenue in Makati City to Sta. Monica, Fair­lane, and Brixton in Pasig City and Bonifacio Global City; the UP–Mir­iam–Ateneo Viaduct, a 1,820-meter four-lane permanent viaduct, which will reduce travel time in Katipunan and CP Garcia by 80 percent; the NLEx-SLEx Connector Project, an 8-km four-lane expressway from C3 Road in Caloocan City to PUP in Sta. Mesa, Manila, which is expected to reduce travel time between SLEx- NLEx from two hours to 30 minutes; the Iloilo-Guimaras-Negros-Cebu Link Bridge, an interisland bridge project that would link the Visayan Islands of Panay, Guimaras, Negros and Cebu; and the Davao City By­pass Construction project, a 44.6- km tunnel and roadway structure that would reduce travel time from Digos in Davao del Sur to Panabo in Davao del Norte by 55 minutes.

Villar said a sustained increase in public infrastructure spending to 5 percent of GDP would add a to­tal of 5-6 percent to GDP after 15 years, as he cited a study conducted by the International Monetary Fund.

“At our highest, a maximum of 3.2 percent was pegged for infra­structure spending. This administra­tion would like to raise the bar and address the deficit. It is the only way we could solve both traffic and flooding,” he said in a statement.

“Development has al­ways been faster than our road and transportation net­works. We’d like to catch up – and hopefully preempt it in the next six years,” he added.

In the 2015 IMF report, it found that the Philip­pines consistently had low­er public investment than other members of the Asso­ciation of Southeast Asian Nations, averaging only 2.5 percent in 2000 to 2014.

Likewise, the study pointed that public capital stock is also one of the low­est among Asean members – at about 35 percent of GDP in 2013. Regional Average is pegged at 72 percent of GDP. “China and India have been spending at least 8 per­cent of their GDP in infra­structure spending. We’d like to catch up. Underspend­ing would not be a problem of this administration,” he said.

Also to get priority are big projects in Mindan­ao and in Metro Manila to create more jobs and uplift the living conditions of Fil­ipinos, Dominguez added.

Among the projects in the government’s pipeline are a big irrigation project in the ARMM in Mindanao, the P200-billion railways proj­ect from Manila to Bicol and projects within Great­er Manila, Dominguez said.

“But our projects really are going to be aimed outside of Greater Manila because we want to create jobs for people there, good jobs, so that we can reduce poverty in those areas,” Dominguez said.

Aside from China’s ODA, there’s $15 billion in private-sector invest­ments that will focus on projects like building a ho­tel chain in the Philippines and developing infrastruc­tures in Clark Green City, according to Dominguez. Over the next six years, Dominguez said, they expect increased public spending to further boost overall growth performance, adding that the administration needs to rapidly build new roads, rail­ways, ports to decongest cit­ies and reduce the logistics cost for most basic goods. While doing this, the government will expand and deepen the financial system.

This is to broaden public access to banks and capi­tal markets, support small business industries with accessible credit, and raise capital for industry, accord­ing to the Finance chief.

With Asean Financial Integration, there is now an opportunity to take advan­tage of the regional pop­ulation of more than 600 million people to raise the production frontier and multiply the country’s econ­omies of scale, he said.

“The new government has put in place a clear, coherent economic strate­gy to reduce poverty rates effectively in the medium term and lift the Philippine economy to high, mid­dle-income status within the space of a generation. We call this the 10-point socio-economic program of the Duterte adminis­tration,” Dominguez said.

With the growth mo­mentum, a low inflation rate, stable currency andstrong political leadership, the Phil­ippines earnestly opens its doors to do business with its neighbors, he added.