Philippines infrastructure: Build, build, build… but not so fast

Philippines infrastructure: Build, build, build… but not so fast
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The Philippines Department of Finance (DOF) has hit back at criticism by a university professor describing the rate of infrastructure development currently underway as being “faster than any other administration achieved in the past.”

According to the DOFs latest economic bulletin 78 infrastructure projects with a combined cost of P2.5 trillion (about US$47bln) are in the pre-construction or construction phase.

The spirited defence by the DOF was in response to claims by Philippines School of Economics Professor Emmanual de Dios who said that rather than public-private partnerships (PPP) the Duterte administration was rallying on official development assistance (ODA) for the projects.

While not denying that projects funded by ODA were contained in the 78, the DOF said “many of the documents for ODA projects have been signed and design of projects is ongoing.

President Duterte not impressed by the slow implementation of Infrastructure development Video ABS-CBN News

While the department’s defence is spirited, it is also being somewhat economical with the truth.

According to independent news site Rappler only seven of the 31 projects scheduled to commence construction this year have broken ground.

The rest are sketches, applications, and thoughts, while more than 60 others have not even progressed to the review stage.

 

Additionally, in April Finance Secretary Carlos Dominguez III told Rappler that the government was veering away from the public-private partnership (PPP) thrust, “Projects will be financed by our taxes, ODA funds, and commercial loans”, he said at the time.

Last week Rappler reported that ODA funding accounted for 73.08 per cent of all projects, while 13 projects accounting for 16.6 per cent be funded from national government revenue under General Appropriations Act (GAA).

JICA committed the first tranche loan to fund the first phase of the Metro Manila Subway

A further 7.7 per cent will be funded through PPP, with not less than 1.28 per cent coming from the private sector. All-in-all pretty much what Professor de Dios said.

The slow implementation has already angered the President, with Department of Public Works and Highways (DPWH), Secretary Mark Villar being told he will be held accountable for the failure of projects to commence, or to complete on time.

Disputing a recent Commission on Audit (COA) report which claimed that only P222.661 billion ($4.2 bln) or 33.6 per cent of the P662.69 billion ($12.4 bln) allocated in the 2017 budget had been disbursed, Mr Villar said the department had actually disbursed P400 billion ($7.5 bln) in 2017, which included and long and short term projects. The COA report, he said, only referred to long-term projects.

Blaming lengthy permit application processes and non-performance by contractors, Mr Villar said 43 contractors involved in some 400 projects are to have their contracts suspended, resulting in the need to start the bidding process again.

According to the COA some P73.351 billion ($1.4 bln) worth of infrastructure projects are either delayed, suspended unimplemented, or have been terminated, costing the DPWH more than P27.65 million ($517,000) in commitment fees to banks.

The government plans to spend between P8 trillion ($149 bln) to P9 trillion ($168 bln) to fast-rack the implementation of at least 33 flagship projects until 2022, with a target of spending P1.1 trillion ($20 bln) this year on ‘big ticket’ infrastructure development.

Philippines big ticket infrastructure items

Among the current big-ticket items currently under development are:

• The first section of a planned P227 billion ($4.3 bln) 25-kilometer (15.5 mile) subway in Metro Manila funded by a 0.1 percent low-interest loan from Japan

• Phase 1 of a 102-kilometer (63.3 miles) segment of the P35.257 billion ($660 mln), 830-kilometer-long (515 miles) Mindanao Railway system, funded by a loan from China

•  A 4.48 kilometre (2.78) bridge over Panguil Bay, Mindanao funded by a P4.9 billion ($91.6 mln) South Korean loan.

• The P4.6 billion ($86 mln) Binondo-Intramuros bridge in Manila, spanning 734 meters and the P4.4-billion ($82 mln) Chico River Pump Irrigation Project in northern Luzon funded by China official development assistance (ODA).

Under the recently unveiled draft of the 2019 budget the DPWH is set receive a windfall of P555.7 billion ($10.5 bln) , a 68.3 percent increase over last year’s allocation of P330.2 billion ($6.2 bln), representing the second largest increase of all government sectors.

On the back of figures showing the Philippine economy grew by an estimated 6.8 per cent in the second quarter of this year The World Bank last week reaffirmed its forecast of a 6.7 per cent rise in Philippines 2018 and 2019 GDP. Infrastructure expenditure is expected to account for about 6.1 per cent of GDP this year and rise to 7.3 per cent by 2022.

 

Feature photo Department of Transportation (Philippines)

 

Related:

  • P2.5-trillion infrastructure projects now off the ground (The Philippine Star)
  • DPWH blames contractors, slow permit application for infra delays (Rappler)
  • Dominguez: ODA-financed infra projects ‘moving ahead’ (The Philippine Star)

 


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Stella-maris Ewudolu

Journalist at AEC News Today
Stella-maris graduated with a Bachelor of Arts, Education from Ebonyi State University, Nigeria in 2005. Between November 2010 and February 2012 she was a staff writer at Daylight Online, Nigeria writing on health, fashion, and relationships. Since 2010 she has worked as a freelance screen writer for 'Nollywood', Nigeria.

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