One year of President Duterte

The Social Weather Stations poll taken on June 23-26 again shows the continuing popularity of President Duterte, with almost 8 in 10 Filipinos expressing approval of his performance. As he approaches his first anniversary in office, he has been very active on both the international and local fronts. His international image remains negative and many legal luminaries do not quite agree with his handling of the South China Sea dispute, and human rights and church groups continue to criticize his war on the drug menace, but his popularity remains high. This is probably explained by the fact that he continues to be viewed as sincerely loving the country and working hard to solve its problems. Even the crisis in Marawi is about to end.

Mr. Duterte may not be perfect and can be crude or even vulgar at times, but that has been his hallmark even before he became president. The people elected him, not for what he is, but for the changes he would bring to the country, foremost of which is his war on drugs, criminality and corruption—problems that are paramount in the minds of the ordinary Filipino. He has shown and proven through his words and actions that he truly cares for the country and is doing what he believes are the solutions to these problems. Perhaps his approach may work, and perhaps it may not. Or even if it works in the short term, it may not be sustainable long term. The fact remains however, that if he fails, the country fails, and if he succeeds, the country succeeds. It is for this reason that we should all hope, and help, for him to succeed.

Mr. Duterte’s “Build, Build, Build” infrastructure program and the Comprehensive Tax Reform Program are exactly what the country needs. A developing country like the Philippines with a growing population needs infrastructure to address the strain caused by this growth. The National Economic and Development Authority headed by Secretary Ernesto Pernia deserves recognition for fast-tracking the evaluation and approval of mega infrastructure projects that are key to the country moving toward a robust and healthy economy. The Mega Manila Subway Project is commendable and should be the start of a mass transit program that is underground-based.

Because of the massive funds that these infrastructure projects would entail, which are beyond what the government can afford, the government is looking seriously at using overseas development assistance (ODA) funds as well as public-private-partnership (PPP) funds to pay for these projects. Many of the current investors in our PPP projects have expressed concern on the use of ODA funds because of the conditions that normally accompany such loans. While interest rates are lower than market rates, longer feasibility studies and requirements, including procurements from the funding country and foreign exchange cover, could add cost to the project that may offset the savings from the lower interest cost. The government is also exploring doing the construction itself and then bidding out the maintenance and operation to the private sector. This has the advantage of better addressing the perennial problem on right of way issues that plague many of the PPPs, causing unnecessary delays and adding costs to the project that eventually are passed on to the consumer. While these approaches may be new and even pose serious challenges, these are by no means insurmountable. Certain refinements would be necessary, but these approaches do make sense and should be explored and pursued.

To raise funds for these megaprojects, the government should also consider issuing new financial instruments, both public and private, that are long-dated, and match the projected cash flows of these projects. Given that these projects are primarily for the public, certain incentives or subsidies may be necessary to make the projects viable. Institutions whose funding requirements are long-term in nature such as the Social Security System, the GSIS and insurance companies could be the primary sources of these funds. These instruments should be marketable and tradable to provide for liquidity notwithstanding their long maturities.

David L. Balangue (balangue@yahoo. com.ph) is chair of the Coalition Against Corruption, Namfrel and Philippine Center for Population and Development Inc.