While attending the 6th ASEAN Connectivity Forum in Seoul, I learned that during the 1960s, the Philippines had the second highest per capita income in Asia, behind only Japan. A decade after, South Korea had passed our country in per capita income terms, largely due to the successful implementation of the Economic Development Plan – where the government and public enterprises accounted for close to 40% of the total domestic investment in the period between 1963 and 1979 for the construction of infrastructure projects like highways, port facilities, electricity, etc.
On the other hand, Philippines’ infrastructure spending in the last five decades only averaged at 2.5%.
It was only in 2017, under the administration of President Rodrigo Duterte that the government budgeted around 5.4% of GDP for infrastructure development, which is more than twice the 2.5% average for the past six administrations in 50 years.
Since June, 2016, DPWH Secretary Mark Villar reported that over 3,945 km of roads and over 2,423 bridges have been constructed.
In November, the Philippine government laid the capsule which marks the start of the construction of the 3.77-kilometer Panguil Bay Bridge connecting Tangub City in Misamis Occidental and Tubod in Lanao del Norte across Panguil Bay in Northern Mindanao.
Upon completion in November, 2021, of the first bridge in the Mega Bridge Network, land travel between Tangub City in Misamis Occidental and Tubod in Lanao del Norte will only take seven minutes from the 2 to 2.5 hours travel at status quo either via Roll-on, Roll-off (RORO) vessel or the 100-kilometer land travel through Panguil Bay Road.
The Panguil Bay Bridge, which is funded by a loan agreement between the Philippine government and the Korean Export Import Bank, will soon be the longest bridge in the country, exceeding by 1.61 km the 2.16-kilometer San Juanico Bridge connecting Samar and Leyte provinces in Eastern Visayas.
The interest rate for the Panguil Bay Bridge Project is 0.15% pr annum.
Debunking the myth propagated by uninformed critics, Department of Finance Secretary Sonny Dominguez noted that the country’s external debt is in fact low and declining — plunging from 66.6% of GDP in 2005 to 22.5% as of end of June, 2018. Moreover, in comparison to our neighbours in Asia, Philippines is still below the average of 30.9% of GDP. For instance, the external debt ratio of Indonesia and Malaysia is at 41.4% (2017), and 68.7% (2017) respectively. The fiscal deficit of the country is also within the 3% deficit target — at 2.2% of GDP in 2017.
In its Economic Bulletin, DOF also noted that borrowing is used to finance productive capital expenditures, which ensure that future servicing streams can be financed by revenues collected from a growing economy. In formulating the Public Investment Program (PIP), the Economic Internal Rate of Return (EIRR) of each project should at least be equal to 15%. Most of the projects approved have EIRRs exceeding 20%.
“Build, Build, Build” is a program that is not only necessary but is in fact long overdue.