THE Duterte administration’s infrastructure spending would reach 7.4 percent of GDP by 2022 with the expected completion of 55 “flagship projects”, according to the chief of the National Economic and Development Authority (Neda).
Socioeconomic Planning Secretary Ernesto M. Pernia said the increase in infrastructure spending is in keeping with the government’s goal of cutting poverty incidence by creating more jobs.
“So, for the whole term of President Duterte, the cumulative amount spent on infrastructure would be close to P9 trillion,”
Pernia said.
The Neda chief said infrastructure projects are “crucial” in providing jobs not only during construction but also after the projects have been completed. The government intends to implement a 24-hour cycle for all its infrastructure projects to ensure the speedy completion of projects.
“Many of these projects will create jobs, in construction then later on they will facilitate the setting up of enterprises and farm activity that would generate further employment,” he said.
The Neda said it will unveil the list of flagship projects after it is presented to the President next month.
The list already includes the 15 projects identified for Chinese loan financing during the Duterte administration. The Neda estimated that these will cost
$6.96 billion.
Three of these projects—the Chico River Pump Irrigation Project, New Centennial Water Source-Kaliwa Dam Project and North-South Railway Project—will be funded this year. The three projects are estimated to cost $3.44 billion or some P172.42 billion.
Increasing the government’s infrastructure to GDP ratio has been a major challenge for the Philippines and is one of its key development constraints, according to multilateral development banks (MDBs), such as the Asian Development Bank (ADB).
The country’s infrastructure to GDP ratio steadily grew from 1.8 percent in 2011 to 5.1 percent in 2016, the first time the country’s infrastructure spending to GDP ratio reached and breached the 5-percent mark.
In its latest report, titled Meeting Asia’s Infrastructure Needs, ADB said Southeast Asian economies need to invest 5.7 percent of GDP until 2030.
This means investing a total of $3.147 trillion between 2016 to 2030 using 2015 prices. This translates to an annual investment of $210 billion until 2030.
These estimates, ADB said, are based on a baseline scenario which places total infrastructure investments in the region to increase to $2.171 trillion between 2016 and 2030 from $1.095 trillion in the 2010 to 2020 period.
This translates to an annual investment of $145 billion in the 2016 to 2030, from $100 billion in the 2010 to 2020 period.
The ADB also said the 45 developing member-countries (DMCs) in Asia Pacific must invest $26.166 trillion until 2030. This translates to $1.744 trillion, or 5.9 percent of the region’s GDP annually.
Focus on resettlement
To ensure that infrastructure projects are completed on time, the Neda said the government would also focus on the resettlement of informal-settler families (ISFs).
For years, Neda officials said the country’s infrastructure projects have been hampered by resettlement issues more than right-of-way acquisitions (ROWA).
Neda Public Information Staff Director Jonathan L. Uy said that, even if the interagency Investment Coordination Committee (ICC) speeds up the approval of projects, the resettlement efforts are not coordinated, causing delays.
“We’ve seen this already in the past. You accelerate approval but you don’t attend to the resettlement [so] nothing happens,” Uy recently told reporters. This entails involving the key shelter agencies, particularly the National Housing Authority, which provides affordable housing units to ISFs.
Neda Undersecretary Rolando G. Tungpalan said the government is now working on a “systematic move” to anticipate the
resettlement requirements for infrastructure projects. Tungpalan said the Housing and Urban Development Coordinating Council is now obtaining information on the projects, particularly the North-South Railway Project South Line, which would require a Rowa spending of P54 billion.
The NSRP Southline was initially designed as a narrow gauge railway. However, the ICC-Cabinet Committee recently approved the Department of Transportation’s proposal to use standard gauge for the railway.
“With the decision to adopt standard gauge from narrow gauge, that will require [more space, more] right-of-way [and more] families [will be] affected,” Tungpalan earlier told the BusinessMirror.