All advanced economies have attained progress on the back of world-class infrastructure. We can look at the examples of Japan, South Korea, Hong Kong and Singapore that built impressive airports, seaports, roads, bridges, railways and subways leading to cities full of skyscrapers.
The administration is very much aware of the critical role of infrastructure projects in shaping up a modern nation—they can also unleash the country’s full economic potential.
President Ferdinand Marcos Jr. is pushing the right button when he made infrastructure projects among his priorities in building our future.
He underscored his commitment to infrastructure development as a key driver of economic growth with the official unveiling of BBM, or “Build, Better, More,” which is an expansion of the “Build, Build, Build” program initiated by former President Rodrigo Duterte.
Beyond the name, the program aims to build on the firm foundation established by the Duterte administration, and keep the growth momentum in the words of President Marcos himself.
Taking its cue, the Department of Budget and Management proposed a P1.196-trillion allocation for infrastructure programs, or 5 percent of the gross domestic product, in the 2023 national budget. The government aims to sustain this ratio at 5 percent to 6 percent of GDP annually until 2028.
It is a far cry from the average infrastructure spending equating to 2 percent to 3 percent of GDP in the past two decades. Our neighbors in Southeast Asia are investing heavily in infrastructure to recharge their economies and improve their competitiveness. Infrastructure is an important indicator in any global competitiveness rankings done by various organizations, such as the World Bank, World Economic Forum, Economist Intelligence Unit and Switzerland’s IMD Business School.
The government’s plan to ramp up infrastructure spending, thus, deserves the people’s support. Investing more in concrete projects will create jobs, connect communities and generate economic opportunities for the people. New roads and bridges will reach more barangays and unlock the value of properties in those areas. These projects will also open new markets, facilitate the flow of people and goods and improve the quality of life among residents.
Infrastructure projects, in addition, will revive tourism and promote new destinations that could not be reached before. They promote the image of the Philippines as a modern country governed by leaders who build structures for the public good.
Among the shovel-ready infrastructure projects are the North-South Commuter Railway, Metro Manila Subway Project and Light Rail Transit Line 1 Cavite Extension Project. They include the Mindanao Railway Project, Panay Railway Project and the Cebu Railway System, apart from new airports, seaports, toll roads and bridges.
The Marcos administration, to me, is on the right track when it encouraged the private sector to participate in infrastructure buildup and explored the privatization option on the existing rail systems in Metro Manila.
While official development assistance (ODA) loans provide low-interest funding for infrastructure projects, the public-private-partnership (PPP) arrangement will help ease the government’s financial burden from these massive projects.
Finance Secretary Benjamin Diokno is chiming in with this new funding approach. He wants to update the implementing rules and regulations of the Build-Operate-Transfer Law to improve the investment climate and attract more private investors in PPP projects.
Under the recently amended Public Service Act, foreign and local investors can also take part in managing public utilities and infrastructure projects, such as telecommunication, toll roads, shipping, airports, water and sanitation. Again, this scheme will free up public resources that are better invested in social services, such as education, health care and security.
I am in full agreement with Economic Planning Secretary Arsenio Balisacan when he said that with PPPs, the government can harness the private sector’s expertise, resources and capacities even as the country faces fiscal constraints. Among the industries that will benefit most from PPPs are energy, logistics, transportation, telecommunications and water infrastructure.
There are many good examples of successful PPP models in the Philippines that include expressways in Luzon; power generation, transmission and distribution; and water services that have dramatically improved over the years. The transfer of management over these projects from the public to the private sector resulted in greater efficiencies and avoided additional financial burden on the government.
Infrastructure projects will contribute to the government’s goals of reducing unemployment rate to 5 percent, bringing down poverty rate to a single-digit level and achieving rapid economic growth that will allow us to become an upper-middle economy by 2023 and attain high-income status in two decades.
The focus on infrastructure development will build a better future for the Filipino people.