In the past, according to CNN, the United States spent 4 percent of GDP on infrastructure and was the envy of the world with its roads and expressways, airports and seaports. It was the leader. Today, it spends 2 percent and is falling rapidly behind.
China, on the other hand, is leaping ahead. Its expressway network of 74,000 kilometers is now the second largest in the world after the United States. Its highway system connects all provincial capitals and cities. China’s high-speed trains, running at a maximum speed of 220 miles per hour, are at par or even faster than their European counterparts. Its high-speed rail network of 4,600 miles is the largest in the world. China’s investments in ports, highways, railways, etc. grew more than twofold from US$41.5 billion in 2000 to $103.4 billion in 2006.
In the 2012-2013 Global Competitiveness Report, China ranked 69th (the Philippines 98th) in terms of quality of overall infrastructure. It placed 22nd in terms of railroad infrastructure (PH 94th); 54th in quality of roads (PH 87th); 59th in terms of port infrastructure (PH 120th); and 70th in quality of air transport infrastructure (PH ranked 112th). The World Bank noted that one primary contributor to China’s “outstanding achievements in economic growth and poverty reduction over the last 15 years … has been the development of its transport infrastructure.” One of the outstanding NON-achievements of the Philippines has been its NON-development of its transport infrastructure.
In the past three decades, the Philippines has annually spent an average 3 percent of GDP on infrastructure. Elsewhere in Asia, the average was nearly 6 percent: Thailand 4.8 percent, Malaysia 5.4 percent, and Indonesia around 7 percent. We have the worst systems in Asia, they have the best. Why? my wife asked.
There are a number of reasons, but two stand out: revenues and attitude. The government doesn’t get enough money; only 14 percent of GDP is paid in taxes versus 17 percent in Malaysia. Too many people cheat, they get rich at our expense, they should be ashamed of themselves (needless to say, they’re not). That’s part of this culture the President is trying to change.
The other is what I’ll call the “loser syndrome.” At the London Olympics, the Philippines’ brightest hope for a medal was Mark Anthony Barriga, a most promising boxer. He lost in the Round of 16. His team’s immediate reaction was to file a protest before the International Amateur Boxing Association, disputing the referee’s decision. In Australia, the loser congratulates the winner, warmly and genuinely, and try harder next time to be the winner.
When a government project is put up for bidding in the Philippines, the loser doesn’t accept his fate, learn how the winner won, and then make every (honest) effort to win next time. He challenges the winner and government in court for supposed anomalies in the bid. The project is delayed. No wonder nothing gets done.
Then we have a namby-pamby government (all of them) that doesn’t have the balls to do what the Constitution mandates: take over land needed for a national project. The Constitution gives the government power of eminent domain. It can acquire the necessary right-of-way. As I’ve argued before, what it should do is give double the market value (independently appraised). It will be cheap compared to the cost of the current years of delay. And who will refuse? They can have my house tomorrow—today, if they want to rush it. As to squatters, it’s just (and “just” is the correct word) a matter of compassionately relocating them. There’s plenty of land available, there just isn’t plenty of political will.
The cost of not-built infrastructure is incalculable: nonproductive time spent in traffic, wasted fuel, cost of delayed goods shipment, loss of tourists (getting there is too difficult, etc.).
All of this has been talked about, and promised. None of it gets DONE. I’m convinced that when a government official promises something will be done, he considers it as having been done. I was most impressed when Secretary Cesar Purisima promised me a document the other day, and it arrived two hours later. The late Secretary Jesse Robredo was like that, too. Twice, things I requested action on got done. While I’m in a praise mode, Secretary Rene Almendras also came through on promised action. But these are the exceptions. Too often it’s a land of promise, in the wrong way.
We need action now. Under the proposed 2013 budget, some P410 billion will be set aside for infrastructure projects and capital outlay. The funds will be used to continue the full paving of arterial/secondary roads and bridges; preserve the existing road network; construct and rehabilitate access roads to tourist spots; and construct and rehabilitate 15 airports and nine seaports and wharves. If these are accomplished, we’ll definitely see dramatic changes. But will these promises turn into reality or, as before, gather dust on a desk of promises?
The much-vaunted Public-Private Partnership program will help solve the funding problem, but it will get mired down in litigation and right-of-way takeovers if change is not made. Eight PPP projects were promised this year. It is now Oct. 11 and only three have been put on the auction block: PPP for Schools, LRT-1 South Extension, and Naia Expressway Phase 2 (may go up to four if the invitation for the Modernization of the Philippine Orthopedic Center is published). Of these, only the PPP for Schools has been awarded; the two others are still in the prequalification phase. Can Cosette Canilao, a most effective lady, get through the bureaucratic jungle, and the determined blockages by some, to get the others signed into beginning?
Or will words conquer action again?