The Market Monitor Minding the Nation's Business
The Philippines is a couple of decades behind its neighbors with regard to infrastructure, Finance Secretary Carlos Dominguez III said during a business forum held recently in Makati City.
Dominguez said, “We need everything from new airport capacity, a cheaper and more efficient power sector, actually functioning rail systems and even new digital pathways. We need more public health care facilities and classrooms. According to some planning experts, we do not only need to decongest cities but do so by building new urban centers.”
However, he said, the country is fortunate that the Philippines’s development partners and other countries in the region are supportive of the Duterte administration’s plans as they are “confident this government means business and is determined to work hard to get things done.”
Dominguez said the government is financing its unparalleled infra program through a mixture of soft loans, grants, official development assistance (ODA) and the public-private partnership (PPP) program.
The Duterte administration’s approved major infra projects so far include the improvement of the Ninoy Aquino International Airport (Naia) and the South Line of the North-South Railway Project, which will be funded through the PPP; the Asian Development Bank (ADB)-supported Metro Manila Bus Rapid Transit; the Metro Manila Flood Management Project, which is backed by the World Bank; New Cebu International Container Port, which will get its funding from Korean ODA; and the Panglao Airport, which is supported by the Japan International Cooperation Agency (JICA), Dominguez said.
He said these projects will be implemented with transparency and proper accountability, as the President had already issued an executive order on Freedom of Information (FOI) covering the Executive branch.
The FOI order would help inspire greater public confidence in the government’s infrastructure program, reduce corruption, and remove the legal obstacles that have delayed the implementation of projects in the past, Dominguez said.
This directive, Dominguez said, “reduces that cloud of public doubt over the conduct of biddings and the awarding of contracts that stymied past efforts to get major infra projects going.”
The Duterte administration’s medium-term vision is to free 6 million Filipinos from poverty and transform the Philippines into a high middle income country six years from now, with a per capita gross national income (GNI) of $4,100, of where China and Thailand are right now.
Its long-term vision is for the country to achieve high-income status by 2040, or 24 years from now, with the country having a per capita GNI of $12,000, like where Malaysia and South Korea are today.
In order to close the infrastructure gap over the next six years, the Duterte administration needs at least P8 trillion, and it is also the job of the Department of Finance (DOF) to generate enough funds to spell the financial sustainability of this ambitious public investment program.
Dominguez said an initial list of 18 big-ticket items worth a total of P427.5 billion have already been approved by the National Economic and Development Authority (Neda) for this unprecedented infrastructure buildup, which “is much more than what the previous administration undertook during its entire tenure in office.”
This underscores the firm resolve of Mr. Duterte to realize his administration’s goal of accelerating infrastructure spending to help pull down the poverty rate to below 15 percent by the time he steps aside in 2022.
“Building infra, as you are aware, has the highest multiplier effect on the economy. It is also indispensable to transforming the nature of our growth so that it is led by investments instead of consumption,” Dominguez said.