Strong Economic Growth is Proof of BBB Success
Critics of the administration are claiming that President Duterte’s “Build, Build, Build” (BBB) infrastructure program is a “dismal failure.”
I totally disagree with that assessment. There are no metrics that show the BBB program is a flop. On the contrary, the infrastructure program is a success if gauged by the number of Filipino jobs it created and its contribution to the overall gross domestic product.
Critics of the BBB program claim that only 2 percent of the 75 flagship projects that were proposed at the start of the Duterte administration have started construction.
One must be familiar with the planning process of the government and the implementation of infrastructure projects—from the feasibility stage to the final approval (or disapproval and temporary postponement) by regulating agencies. The National Economic and Development Authority (Neda) receives and acts on many proposals after subjecting them to thorough feasibility studies.
The Neda may disapprove of some proposed projects for several reasons. But the disapproval does not mean that a particular project is completely shelved or may not start construction at all. Not all projects submitted to the Neda, of course, will be approved. Budgetary constraints may prompt the Neda and the implementing agencies to temporarily shelve them in favor of more priority projects. Some of them may not be economically viable at the outset for technical reasons.
A proposed bridge project connecting two towns, for example, may not be viable to build from the start. The two may be third- or fourth-class municipalities with little income and economic activities. The bridge will serve no purpose if there are not enough vehicles passing through it. The bridge project, thus, is not economically viable.
However, a bridge project will be viable even if only one municipality has enough income. The bridge will serve its purpose because the more progressive town can improve the income of the poorer municipality through trade.
Accusations that the government’s BBB program is a failure, therefore, are baseless. President Duterte and Presidential Spokesman Salvador Panelo both refuted the claims of Duterte’s critics. The previous administration, on the contrary, has done little in six years in terms of infrastructure projects.
The Duterte administration is, in fact, constructing or about to build several big-ticket projects. These include the Mindanao Railway, the LRT 1 Cavite Extension (Baclaran-Cavite), Metro Manila Subway, MRT Common Station, LRT 2 East Extension, Sangley Airport, Naia Rehabilitation, Clark Airport Expansion, PNR Clark, PNR Bicol, PNR Calamba and Subic-Clark Railway.
The BBB serves as the government’s medium-term goal to increase infrastructure spending from 5.4 percent of the GDP in 2017 to 7.3 percent by the end of 2022, the highest budget allocation for infrastructure in Philippine history. The Neda earlier identified 75 infrastructure flagship projects for development, approval, implementation and review.
Bases Conversion and Development Authority President Vince Dizon, who is President Duterte’s adviser on flagship programs and projects, has also dismissed the claims of critics. The inroads in the infrastructure program, he said, has raised government spending on infrastructure development that largely contributed to the GDP growth.
Dizon noted that the Duterte administration had spent more than double what previous governments spent on infrastructure. The government has already spent over a trillion pesos in infrastructure from 2016 to 2018.
The heavy spending has impressed foreign financing institutions like the World Bank and the International Monetary Fund. It also made the Philippines more attractive to foreign investors, who are all aware of the impact of the infrastructure projects on economic development.
Administration critics understandably are starting to make political noise in their effort to attract the attention of voters in the next presidential elections. But I believe they will run out of ammunition in discrediting the current administration. The country’s macroeconomic fundamentals remain solid and the economy continues to grow at a robust pace of 6 percent to 7 percent.
Happy New Year to All!