Downsized promise
Two and a half years after the celebrated launch of “Dutertenomics,” which was supposed to usher in a “Golden Age of Infrastructure” in the country, the Duterte administration is coming to grips with the harsh reality that grandiose ambition can only take it so far.
As it turns out, the government’s ambitious “Build, Build, Build” (BBB) centerpiece economic program is falling far short of its targets. A number of the promised 75 flagship infrastructure projects — among them the P57.6-billion Luzon-Samar Link Bridge, the P56.6-billion Cebu-Bohol Link Bridge and the P47.4-billion Leyte-Surigao Link Bridge that were supposed to hasten interisland travel — have now been dropped and belatedly declared as no longer feasible.
Malacañang’s economic and infrastructure teams have announced they are reviewing the BBB program and subjecting the list of “game-changing” projects to a “viability check,” to ensure that many will be completed or at least started before the end of President Duterte’s term in 2022.
But the government will have to play serious catch-up, as according to the latest status report of the National Economic Development Authority on the progress of the BBB program as of July, only 21 projects worth P187.6 billion, out of the 75 projects with a price tag of P2.4 trillion, will be finished by 2022.
Of the 46 projects under implementation, only two have been completed, and just nine are under construction, including the Clark International Airport Expansion project and three controversial China-financed projects: the Chico River Pump Irrigation Project, Binondo-Intramuros Bridge and Estrella Pantaleon Bridge.
At the minimum, BBB’s promise — hinged on massive Chinese loans and grants that were supposed to result from Mr. Duterte’s landmark foreign policy pivot to China — was that it would increase productivity, reduce poverty and keep the economy growing at a fast clip.
But now, the country’s economic managers are recalibrating their approach, and have said they welcome the greater participation of the private sector through the public-private partnership program (PPP).
As it stands, only nine of the initial list of 75 flagship projects have private sector participation, with the bulk to be financed through annual appropriation and official development assistance.
But, “Over time, minds tend to adjust to reality,” admitted Socioeconomic Planning Secretary Ernesto M. Pernia, underscoring the administration’s realization, more than three years into its term, that the government cannot underwrite its infrastructure development push alone.
Thus, it is now more likely that the updated list of BBB projects will include project proposals from the private sector, such as the P735-billion San Miguel Corp.-led New Manila International Airport project in Bulacan; the rehabilitation of Ninoy Aquino International Airport—the country’s main gateway — by the consortium of some of the country’s largest conglomerates; and the airport projects pushed by the Aboitiz Group in Bohol and by Chelsea Logistics and Infrastructure Holdings Corp. led by Dennis Uy in Davao.
The review is likewise expected to result in a longer list of 100 flagship projects, as some of the 75 projects deemed “challenging and costly” will be dropped in favor of “smaller but still game-changing” substitute projects such as roads, bridges and irrigation facilities outside Metro Manila that stand a better chance of being implemented by 2022.
To recall, the Duterte administration had shunned the PPP mode favored by the administration of President Benigno Aquino III as the process was deemed too slow and could be too accommodating of the bottom line of private companies at the risk of taxpayer money.
But the splashy replacement program has been confronted by largely the same perennial implementation bottlenecks: issues with right of way, delays in the approval process, the low absorptive capacity of the implementing agencies, and budgetary constraints (China’s promise of help in 2016 was up to $9 billion; only $924 million has materialized by October this year).
While spending on infrastructure is now up to 5 percent of gross domestic product — “double the average spending over the last 50 years,” stressed Finance Secretary Carlos G. Dominguez III — and the plan is still to bring that figure up to 7 percent by 2022, the Duterte administration has a scant three years left.
Reality has bitten, and the lofty promise — which, it should be noted, is directly connected to the Philippines’ abject stance toward Beijing, its meek endurance of episode after episode of Chinese provocation in exchange for guarantees of assistance — is getting markedly downsized.
