A CONSTRUCTION executive once said: “The Philippines is like a teenager wearing kid’s clothes. We have outgrown our clothes.”
As the economy grows, the country’s infrastructure, many of which were built during the Marcos era, cannot keep up. Traffic jams are a common sight in many Metro Manila streets on almost the entire day and night times. These are also being felt in major cities in the country such as in Cebu, Davao and Iloilo.
The Duterte administration promised what they called the “Golden Age of Infrastructure” in the Philippine during his term as it seeks to continue what the previous government has started. However, midway into his term and with the upcoming mid-term elections, critics say no significant infrastructure project has been started.
Public Works and Highways Secretary Mark A. Villar, however, is quick to say that big-ticket infrastructure projects take time as they are now following a master plan of most projects, instead of just patchy works.
“We have to manage expectations. These master plans are not easy to do. A feasibility for the master plan of a large-scale project takes almost a year. The detailed engineering can take six months even if it’s a major project,” Villar explained at a recent BusinessMirror Coffee Club forum.
Villar, the son of former Senate President Manuel B. Villar Jr., said that the wait is over and that they are ready to fulfill’s Duterte’s promise of a golden age.
“So these will be the years when you will see the construction of many of these large-scale projects,” he said.
The DPWH, the principal engineering and construction arm of the government, is mainly focused on building roads and bridges, but it also has projects on flood control systems, water resource development projects and other public works geared towards the attainment of sustainable growth and development, according to the agency.
“The Philippine national road network is in a continuous state of improvement as it plays an important role in the economic development of the country. The condition of national roads is often used as an index to assess the extent of the country’s progress,” the DPWH said.
As such, the Duterte administration is pouring more money into the agency to carry out several infrastructure projects.
Villar pointed out that the agency now has a budget of P650 billion, or more than half of the P1.06-trillion budget for the government’s Build, Build, Build program. The said amount does not include the private-sector led initiatives.
He said DPWH’s current budget is a significant improvement from the budget allocated by the previous administration. The Aquino administration gave a budget for the agency at just P110.63 billion in 2011 and improved this to P397.11 billion in 2016.
Villar, however, said with the current larger budget, the country was able to improve its investments in infrastructure to 5 percent of the country’s gross domestic product, from the previous administration’s 2 percent of GDP, the measure of all goods and services produced locally.
“But when compared with other countries, they are spending more in infrastructure. The GDP growth of China reaches 10 percent and even India at the same pace of growth. If we want to achieve high growth we need to invest in high yielding investments like infrastructure,” Villar said.
As the Philippines still lags behind even its Southeast Asian neighbors on infrastructure spending, Villar said the government is making sure that it can hurdle any roadblock that will be in the way of the BBB.
Funding, he said, has been resolved for these projects since a number of financial institutions had earlier agreed to lend money to many construction firms. Finished projects and those that are already in operation can be listed at the Philippine Stock Exchange so the proponent can raise funds to pay off its debt.
Supply issues
One issue, however, that hounds the projects pertains to supply.
There were concerns of construction supply issues if and when the infrastructure projects start to roll.
Contractors, Villar said, have already done their massive investments in equipment and suppliers of construction materials are already reserving with their respective sources in anticipation of huge orders.
For example, SteelAsia, the country’s largest manufacturer of steel, has been ramping up its production the past few years, driven much by the growing demand from the construction industry. It recently reported topping the one million metric tons of rebars for the first semester.
Building solutions provider Holcim Philippines Inc. recently met with Trade and Industry Secretary Ramon Lopez to share the company’s initiatives to better support the government in upgrading the country’s infrastructure through stable supply of quality cement nationwide.
Holcim Philippines’ current projects are seen to raise its cement capacity nationwide to 12 million metric tons by 2019 from the current 10 million metric tons.
Villar banks on the assurances of the government’s private partners. “There are still challenges. But people are coping because they are anticipating the BBB (implementation),” he said.
On the other hand, the skyrocketing inflation figures were feared to have put at risk some of the projects that have long been allocated a budget and are just waiting for the government’s go-ahead.
“I don’t see any delay. A lot of the prices in the inflation is fueled mostly by the agricultural [issues], so for us I don’t think the effect is that large. We have provisions,” he said.
“Regularly, we update our unit price analysis. We update our contracts regularly. The contractor are also a factor in these also. There would be fluctuations in price, that cannot be avoided. But it’s (inflation) a short term problem the government will act quickly,” he said.
Manpower
Then there’s another supply issue—of skilled workers and laborers who will carry out such massive projects. Villar said the DPWH is regularly holding job fairs, every two to three months, in coordination with other government agencies, mainly in anticipation of these projects as it now competes with the private sector-led project that has the same magnitude.
He said they found out that most of the people that they accepted were returning engineers and laborers that came from Saudi Arabia and other Middle East nations.
“I’ve seen them personally; I’ve met them personally; and I’ve heard their stories. Some of them were hired by our contractors on the spot,” Villar said on the skilled workers. And with all the concerns in place, Villar said that they are making sure that the country’s Golden Age of Infrastructure will finally become a reality.