A Cabinet-level delegation, led by Finance Secretary Carlos G. Dominguez III and other members of the economic team, will bring a three-day economic road show to China on Friday to pitch the government’s proposed renminbi-dominated Panda bond offering before potential investors.
Dominguez, along with Executive Secretary Salvador C. Medialdea, Budget Secretary Benjamin E. Diokno, Transport Secretary Arthur P. Tugade, Public Works Secretary Mark A. Villar and Vivencio B. Dizon, president of the Bases Conversion and Development Authority (BCDA), will also meet with high-ranking Chinese officials to discuss the progress of the preparations for the Philippines’ infrastructure projects that would funded in part by official development assistance (ODA) loans from China.
The delegation will meet with Chinese ministry officials on September 27 in Beijing and proceed the following day to Shanghai, China’s financial center, to generate support for the “Build, Build, Build” program of the Duterte administration.
Dominguez said the economic team will also spearhead a “nondeal road show” to entice potential buyers of the Philippines’s Panda bond offering, tentatively scheduled in the last quarter of the year “depending on market conditions.”
The nondeal road show will also be an opportunity to inform potential investors of the rosy outlook of the Philippine economy under the Duterte administration’s infrastructure buildup program.
The government is planning to spend between P8 trillion and P9 trillion for infrastructure over the next five years.
Based on National Economic and Development Authority estimates, the buildup is expected to generate 106,824 additional jobs this year alone; 823,696 jobs in 2018; 1,115,999 jobs in 2019; 1,228,963 jobs in 2020; 1,399,463 jobs in 2021; and 1,705,023 jobs in 2022.
While the average spending for infrastructure in past administrations was 2.6 percent of the GDP, President Duterte plans to ramp this up to 5.32 percent of GDP this year alone with an infra budget of P847 billion.
The government plans to gradually increase the public infrastructure budget to 1.2 trillion in 2018; 1.4 trillion in 2019; P1.5 trillion in 2020; P1.7 trillion in 2021; and P1.9 trillion in 2022.
According to Dominguez, the infrastructure buildup will be funded by a combination of resources from its proposed Comprehensive Tax Reform Program (CTRP), foreign development aid and commercial loans.
He said the first package of the CTRP—the Tax Reform for Acceleration and Inclusion Act now pending in Congress—will serve as the “cornerstone” of the funding for the ambitious infrastructure program.
In March the Philippines and China signed agreements on the conduct of preliminary studies for two proposed big-ticket infrastructure projects in the Visayas and Mindanao during the visit of Chinese Vice Premier Wang Yang to Duterte’s home city of Davao.
Dominguez and China Commerce Vice Minister Fu Ziying, who is also China’s International Trade Representative, formalized the agreement on the conduct of preliminary feasibility studies for the proposed Davao City Expressway and the Panay-Guimaras-Negros Island Bridges Project through an exchange of letters.
Pernia and Fu also signed a six-year development program (SYDP) that “aims to steer and promote the stable and orderly development of economic cooperation between the two countries”.
The SYDP also aims to “enlarge the scope and enhance the level of cooperation between, and drive sustainable and inclusive socioeconomic development in, the two countries,” according to the Department of Finance.