Build, Build, Build an ambitious infra plan

Published March 27, 2018, 10:00 PM

by Mario Casayuran and Vanne Elaine Terrazola

By Chino S. Leyco

(Malacañang Photo)
(Malacañang Photo)

The Duterte administration’s ambitious infrastructure program kicked off last year, and once fully completed, it should modernize the country’s dilapidated roads, railways, ports and airports over the medium term.

Promising to usher in a “golden age of infrastructure,” the Duterte government unveiled its P8.4-trillion Build, Build, Build program, the most ambitious infrastructure plan that the Philippine government has undertaken so far.

Under the program that runs within the Duterte administration’s term, the government will raise the annual spending on public works to seven percent of the economy, as measured by the country’s gross domestic product (GDP), from current levels which is less than three percent.

(Photo by Richard V. Viñas)
(Photo by Richard V. Viñas)

The government plans to gradually increase the public infrastructure budget to P1.2 trillion this year; P1.4 trillion next year; P1.5 trillion in 2020; P1.7 trillion the following year; and P1.9 trillion in 2022 to support the envisioned infrastructure boom.

The Duterte administration is aiming to build 75 small- and big-ticket infrastructure projects within the controversial chief executive’s term, which ends 2022.

The 75 identified flagship projects include six airports, nine railways, three rapid-bus transits, 32 roads and bridges, as well as four seaports that the government hopes would help cut down the costs of production, improve rural incomes, and encourage countryside investments.

Likewise, the government plans to invest in four energy facilities, 10 water resource projects including irrigation systems; five flood control facilities; and three redevelopment programs.

President Rodrigo R. Duterte’s economic team, headed by Finance Secretary Carlos G. Dominguez III, said that majority of the government’s 75 flagship infrastructure projects are now in the construction or pre-construction stage since the program’s launching in 2016.

Dominguez now promises that the “Build, Build, Build” program would shift to high gear starting this year with the rollout of the first set of big-ticket infrastructure projects and the implementation of the tax reform law that will help support these projects.

About a fourth of the funding needed for the government’s P8.44-trillion infrastructure modernization program will come from the Tax Reform for Acceleration and Inclusion (TRAIN) revenues, while the rest will be funded by official development assistance (ODA).

Among the “Build, Build, Build” projects that have moved forward is the P23-billion Metro Manila Flood Management Project, which is being co-funded by the Asian Infrastructure Investment Bank and the World Bank.

Others are the P151-billion Philippine National Railways South Long Haul Line to be financed by ODA loans from China; the P355.6-billion Mega Manila Subway that will be funded by Japanese ODA; and the P19.8-billion Davao City Bypass Road.

One of the biggest infrastructure plans was also recently sealed with the loan agreement signing of the P355.6-billion Metro Manila Subway project, the first of its kind in the Philippines, with the Japan International Cooperation Agency.

To skirt the stringent red tape in the implementation of infrastructure projects, the Duterte administration decided to shy away from the traditional Public Private Partnership (PPP) scheme adopted by former President Benigno S. Aquino III.

To recall, foreign and local businesses have been frustrated with the Aquino administration’s PPP projects, which often took a long time to kick off due to several government regulations that had to be met.

To hasten project implementation, Duterte decided that all projects will be entirely funded by the government, which his economic managers say should simplify the process.

Dominguez, meanwhile, said that proposals for PPPs to implement infrastructure projects are still welcome.

The finance chief also added that unsolicited proposals from the private sector that require no direct government guarantees and include new technologies or concepts will also be accepted by the government, but should involve projects that “address public need.”

The government has already approved so far the auction of 21 projects, including the overhaul of Metro Manila’s shabby airport and a railway line on Mindanao island in the south. Other projects include upgrading ports, roads, rail links and irrigation.

Aside from elevating the quality of the country’s infrastructure status, Duterte also envisioned that the ambitious “Build, Build, Build” projects will result in the reduction of poverty from 21.6 percent in 2015 to between 13 percent and 15 percent by 2022.

Based on National Economic and Development Authority estimates, the infrastructure program is expected to have generated 106,824 additional jobs last year, while another 823,696 this year; 1.11 million in 2019; 1.23 million in 2020; 1.4 million in 2021; and 1.7 million in 2022.