Maximizing infra boom for the poor

At the recent Boao Forum in Hainan, China, President Duterte trumpeted his administration’s “Build, build, build” program as the “solid backbone” of Philippine growth. Since he assumed office in 2016, we have witnessed an unprecedented allocation of resources to solve infrastructure gaps, which, to date, remains the “weakest link” in our economy.

The Stratbase Albert del Rosario Institute (ADRi) for Strategic and International Studies recently organized a roundtable forum on the government’s infrastructure program and its impact on the majority of the poor. Representatives of the academe, civil society and the government shared their insights, recommendations, and apprehensions on the execution of the ambitious infrastructure plan.

Hopes are generally high, but questions remain on the government’s capability to implement “big-ticket” programs according to world-class standards and on time.

During the forum, Dr. Alvin Ang, director of Ateneo Center for Economic Research and Development, presented the findings of his special study titled “Financing Inclusive Infrastructure.” He cited the need to make infrastructure development “inclusive” to enable a larger segment of the Filipino population to benefit from the growth.

The “infrastructure gaps” prevent the poor sectors of society from feeling the benefits of economic growth. Instead of gaining from the influx of investments and dynamic trade relations, the poor remain at the outskirts. They can only pin their hopes on the success of the grand infrastructure program of the Duterte administration.

For instance, the study showed that the bulk of the 70 flagship projects under the “Build, build, build” program is still concentrated in Luzon and the National Capital Region. Forty-six projects, or 66 percent of the total, are in Luzon and the balance are in the Visayas and Mindanao.

According to Ang, significant investment needs in other regions have to be met “for the growth to be inclusive.” He also noted that growth outcomes should be supported by “an infrastructure program to sustain them and help other regions catch up with NCR and Calabarzon to decongest and distribute growth across the country.”

The Japan International Cooperation Agency has warned that if no drastic actions are done to fix our infrastructure program, we will be losing P5.4 billion every day by 2035.

The increased infrastructure spending of up to 7.4 percent of the gross domestic product (GDP) by 2022 will boost the expectations of Filipinos that these investments will redound to more jobs and livelihood and less traffic congestion in urban cities.

Ang, however, urged the Duterte administration to “expand and facilitate current infrastructure for further growth in Luzon and work on specific infrastructure in the Visayas and Mindanao.”

“The challenge is not in the plan itself, but in how to execute and finance these projects,” Ang said. There is a need, he said, for the administration “to improve governance at different levels, whether business- or infrastructure-related.” Execution issues remain a “bigger challenge to achieving inclusivity,” he said.

Despite past experiences, the government is still having difficulty overcoming the serious challenges brought about by issues related to right of way, procurement, and budget bottlenecks. Given the urgency of the times, we just can’t afford another six years of delay, as well as haphazard and poorly implemented infrastructure projects.

Dr. Romy Bernardo, a fellow of the Foundation for Economic Freedom, said the method of funding infrastructure projects—whether by official development assistance or through public-private partnerships—is not as critical as ensuring that the projects are “socially desirable, economically sound, and are built and operated well.”

Experts agree that financing is not a major concern at this point. Whether the Philippines can address the numerous execution challenges is the bigger issue.

We hope the implementing agencies will rise to the challenges that have beleaguered their predecessors. We hope to see faster implementation and faster disbursement in the first semester of 2018 so as not to dampen the people’s expectations.

Let us hope that the success of the “Build, build, build” program is indeed anchored on a “solid backbone,” not on a mere wishbone.

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Dindo Manhit is founder and managing director of Stratbase Group.