First of two parts
Infrastructure development will remain the key ingredient to accelerate Philippine economic growth and make it more inclusive, regardless of changes in the presidency.
The projects undertaken in the past, as well as ongoing projects, are still not enough to bring the country on a par with other major economies in Southeast Asia. Inadequate infrastructure has been blamed for other problems, including the traffic congestion in Metro Manila; lack of connectivity among the country’s many islands; and our failure to attract as much foreign investments as other emerging economies.
The government is not capable of undertaking big-ticket infrastructure projects on its own, so it launched in 2010 the Public-Private Partnership (PPP) Program, the modern version of the build-operate-transfer (BOT) scheme. The PPP is expected to remain as the flagship infrastructure program of the new administration.
The Philippine Chamber of Commerce and Industry (PCCI) says the PPP Program should be improved to gain headway in the country’s infrastructure gaps. Noting that implementation of the program had been slow, PCCI President George Barcelon said the next administration should accelerate the implementation of the PPP program to sustain or speed up economic growth.
In its 2016 Global Economic Prospects report, the World Bank said accelerated implementation of PPP projects and election spending would drive the Philippine economy to a 6.4-percent growth in 2016, up from 5.8 percent last year. Since 2010, the incumbent administration has awarded 12 projects worth about P217 billion.
Many more projects are in the bidding and other stages of implementation. Data from the PPP Center show 14 projects in the procurement stage (prequalification of bidders and bidding). Scheduled for rollout are the North Luzon Expressway-South Luzon Expressway connector road project and the Light Rail Transit (LRT) Line 4 project, which starts from Taytay in Rizal to the Ortigas-Edsa junction.
For its part, the World Bank has identified 15 PPP projects worth about P500 billion as essential to the country’s infrastructure connectivity with other members of the Association of Southeast Asian Nations.
In general, implementation of infrastructure projects is suspended during elections. Fortunately, the Commission on Elections has exempted 13 PPP projects worth a total of P514 billion, from the ban on public works and infrastructure projects, which lasts from March 25 to May 8. The exemption was granted on the ground that the PPP projects were being funded by the private sector and not by the government.
The projects on the exempted list are the P122-billion Laguna Lakeshore Expressway Dike; the P170.7-billion North-South Railway; the P19-billion Davao Sasa Port Modernization; the P18.72-billion Kaliwa Dam project; airport construction and operation projects in Bohol, Laguindingan, Davao, Iloilo and Davao with a combined cost of P108.19 billion; LRT Line 2; the P50.18-billion regional prison facility in Nueva Ecija; the P24.4-billion Bulacan Bulk Water Supply project; and the P298-million Road Transport Information System project.
To be concluded
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Image credits: Bloomberg