In his speech during the 51st annual meeting of the Asian Development Bank’s (ADB) Board of Governors, President Duterte urged the multilateral development bank to lend more to the Philippines. Duterte said the government needs more funds to bankroll the implementation of infrastructure projects under the “Build, Build, Build” program. Build, Build, Build, or BBB, is an ambitious program that would require some P8 trillion until 2022.
The government would certainly need more funds as it had declared that it intends to finance the rollout of various infrastructure projects than resort to the public-private partnership scheme introduced during the previous administration. While not totally abandoning PPPs, the current administration would rather spend for public infrastructure projects to fast-track the implementation of projects, which seek to create more jobs to cut poverty incidence.
Poverty, however, is more prevalent in the countryside. The International Fund for Agriculture Development (Ifad) noted that more than half of the Philippines’s 100 million people live in rural areas and many of them are poor. The Ifad said agriculture is the primary and often only source of income for poor rural people, most of whom depend on subsistence farming and fishing for their livelihood. Data from the Philippine Statistics Authority showed that among the nine basic sectors, the poorest were farmers and fishermen. In 2015 poverty incidence among farmers and fishermen were at 34.3 percent and 34 percent, respectively. The PSA noted that these sectors also recorded the highest poverty incidence in 2006, 2009 and 2012.
The government policy-makers did not seem to pay much attention to these figures when they crafted the BBB program. Of the 75 big-ticket “flagship projects”, only 11 are for the agriculture sector and are mostly focused on irrigation. Flagship projects are considered “high impact” or “game changing” because of their potential to create more jobs.
The agriculture sector is also in dire need of “flagship” projects, or those that would provide a boost to farmers’ production. The previous administration attempted to do this under the PPP scheme. These big projects include the establishment of cold-chain systems along four major food routes to and from Metro Manila and Cebu, and the construction of rice processing and trading centers with bulk handling and logistics support in 10 major seaports nationwide.
The Duterte administration must go beyond irrigation projects and the construction of farm-to-market roads if it wants to spur the growth of the farm sector. The 2017-2022 Public Investment Program is a good start as there are a number of research and development projects that have yet to secure funding. These are projects that aim to improve the quality of food produced in the country, cut production costs and help farmers in their planting decisions. At this time, when the Duterte administration is banking on the farm sector to boost export receipts, local food producers need all the assistance they can get to increase their competitiveness. The government would do well to keep this in mind when officials go around seeking more funds from multilateral development banks.