INFRASTRUCTURE is vital for the long-term growth and competitiveness of emerging economies. In Asean improvements to connectivity and energy supplies are helping to improve the standard of living and making countries in the region increasingly attractive for investors. Expanding economies like the Philippines are demanding an even greater focus on the development of infrastructure. It is good to see that the incoming Duterte administration is committed to develop much-needed infrastructure. Incoming Budget Secretary Benjamin E. Diokno is looking at spending P800 billion to P1 trillion in this sector, with emphasis on infrastructure development and agriculture.
Existing infrastructure gaps are handicapping the Philippines’s productivity and competitiveness. Traffic congestion in Metro Manila and Metro Cebu is severely reducing the productivity of millions of workers every day, while international gateways for passengers and cargo, such as the Ninoy Aquino International Airport and the Manila port, struggle to keep up with increasing demand. Therefore, if economic growth is to be sustained, there is an urgent need for the development of major infrastructure projects that meet high international standards. For that to happen, there is a requirement for capital investment, innovation and knowledge/technology transfer of the latest international trends. As a global leader in high standard, technologically advanced, innovative infrastructure development, the European Union (EU) infrastructure sector has the potential and is willing to contribute to the development of vital infrastructure projects across the Philippines. However, there are major barriers that hinder the participation of EU infrastructure companies in infrastructure-development initiatives in the Philippines, such as the unfair licensing system of the Philippine Contractors Accreditation Board, limiting foreign contractors to 40 percent, although there is nothing in the law that prevents 100-percent ownership of foreign contractors. If these are addressed, it will open the way for EU companies to contribute to infrastructure in the Philippines that facilitates economic growth through better connectivity for international tourist arrivals, less costly transportation of imports and exports, and more productivity due to reduced commuting times for professionals both in Manila and other urban areas.
Let me briefly address another important issue: Brexit. It is certainly unfortunate that UK citizens have decided in a national referendum last week to leave the EU. We have seen the initial negative reactions with regard to stock exchanges and currencies; we also saw the reactions by British citizens who are trying to get a second referendum to reverse the negative vote; and the reaction of Scotland not to approve the referendum in the Scottish parliament and possible look at a referendum to leave the UK and if positive, to then join the EU. Given the fact that exit negotiations will only start not later than October and that the effective exit will not take place within the next two years, there is time to watch the drama to unfold. The Brexit is certainly a wake-up call for the EU to study the negative reactions against not-so-democratic Brussels, which are not limited to the UK; they are raised in other EU member-countries also. It is time for a constructive restructuring of the EU; more effective leadership is needed to secure the EU as a valuable global player.