The Philippines has one of the fastest-growing economies in Asia, judging from the 5.9-percent gross domestic product expansion it registered in the third quarter of the year. Sustaining this robust economic expansion through the next few years is now the challenge.
Political stability is one major factor that will assure growth—and the Philippines has achieved that in the past two decades despite the political noises. The nation also managed to keep its macro-economic fundamentals sound as affirmed by several credit rating agencies and multilateral funding institutions like the World Bank.
One factor that will keep our growth trajectory higher and keep pace with the progress of our Asian neighbors, in my opinion, is infrastructure spending. President Ferdinand Marcos Jr. early in his administration stressed the importance of big infrastructure projects and their positive impact on the economy.
He announced infrastructure flagship projects amounting to about P8.7 trillion or $156.4 billion to leapfrog the Philippine economy. I don’t want to sound repetitive but we need to implement these infrastructure projects to improve the lot of many Filipinos.
Infrastructure projects like roads, airports, seaports and railways link supply chains and move goods and services across regional borders more efficiently. They connect our agricultural farmers to markets found mostly in urban centers, and open up the countryside to big-spending foreign tourists. Increased productions and services mean more jobs.
Roads and airports will open new economic corridors and create additional business opportunities for property and mall developers. They will lead to the emergence of more small entrepreneurs, like operators of sari-sari stores and smaller transportation modes.
The higher income of the countryside, in turn, will pave the way for improved services, such as healthcare and education and, of course, faster consumer spending. Infrastructure projects trim productivity constraints and raise competitiveness of business operations. They result in lower prices of goods and services—and reduce inflation.
The implementation of infrastructure projects, however, is not always smooth sailing and the government must do its share to streamline the process beginning with the preparation stage. Just last week, the government made an effort to speed up the processing of documentary requirements for infrastructure flagship projects. The step is critical to simplify the requirements and clearances needed by implementing agencies for priority infrastructure projects.
The Marcos administration appears to be on the right track in speeding up the construction of these projects. The processing period for Public-Private Partnership projects averaged just 40 days under the Marcos administration, or half of the prescribed maximum working-day processing period, per the report of the National Economic and Development Authority.
The speedier processing allowed the government to approve five PPP projects, including the Ninoy Aquino International Airport, the Tarlac-Pangasinan-La Union Expressway Extension and the newly approved Dialysis Renal Center for the Baguio General Hospital and Medical Center.
A further tweaking of the rules and regulations concerning infrastructure projects is still needed. To this end, Neda is improving the PPP code by strengthening the government’s PPP Program through the consolidation of all legal frameworks and the creation of a unified system that will further enhance private sector participation. The proposed PPP Code is now awaiting the signature of President Marcos that will hopefully address the fragmented legal frameworks for PPPs.
One reform that I find helpful is the intent to uphold and retain local autonomy while providing mechanisms to ensure harmonized investment programming between local government units and the national government.
I am sure that reforms in the PPP framework will convince more foreign investors to join the government’s infrastructure thrust, as pitched several times by President Marcos in his official foreign visits.
I am also confident that with higher revenues and a responsible fiscal regime, the Philippines will not miss a step on its path to recovery and progress. The infrastructure projects, even if completed beyond the term of this administration, are our insurance for economic success.
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