Gov’t asked to address infrastructure ‘crisis’

The Philippines could grow its domestic economy by at least 7 percent in the next few years if the Duterte administration could address massive infrastructure bottlenecks that were considered of “crisis” proportion under this regime, the top analyst of global Swiss private bank Julius Baer said.

In a presentation before the Philippines Investment Conference 2016 organized by the CFA (Chartered Financial Analysts) Society Philippines Tuesday, Julius Baer head of research Mark Matthews said that “infrastructure crisis” was the biggest issue that this country was facing today, after Fidel V. Ramos tackled the power crisis and Gloria Macapagal-Arroyo dealt with the fiscal crisis.

If President Duterte could address the infrastructure crisis, he said the trend gross domestic product (GDP) could breach the 7-percent mark in the next few years.

In the same forum, Budget Secretary Benjamin Diokno said this administration would bring the country to a “golden age of infrastructure.”

Infrastructure outlay this year was programmed by the government at P575.67 billion equivalent to 4.3 percent of GDP, rising to P756.44 billion or 5.1 percent of GDP next year and further to P860.65 billion or 5.4 percent of GDP.

He noted how the market had rewarded the country for arresting the fiscal deterioration during the Macapagal-Arroyo administration.  To date, the Philippine sovereign enjoys an investment grade rating from all three major global credit rating agencies.

The trend GDP growth rate under the Aquino administration (2010 to 2015) improved to 6.2 percent, led by the rebound in the industrial sector and the resilient services sector. This improved from the numbers during all post-Edsa Revolution predecessors: 4.8 percent under Macapagal-Arroyo, 2.3 percent under Estrada, 3.1 percent under Ramos and 3.4 percent under Corazon Aquino.

Matthews said he always felt strongly about the Philippines’ great advantage in people, with its population of 100 million seen doubling in the next 30-40 years. “That’s a phenomenal growth for the Philippines and anyone involved in consumer industry,” he said.

The analyst was hopeful the technology would give the country’s human resources the right opportunity.  He said the world was about three to four years away from a major shift in technology, which to date was already disrupting a number of traditional businesses.

On how Duterte’s rhetorics were affecting flows of funds to or from the Philippines, Matthews said “it’s definitely a factor.”

Like in the case of US presidential candidate Donald Trump saying all the “crazy stuff,” he said Duterte’s policies were “very good.”

Unfortunately, Matthews said people had been hearing more of such rhetoric from Duterte, such as not caring about credit rating agencies or opening up alliances with China and Russia.