Understanding the ‘Build, Build, Build’ program

Productivity depends on many factors, including our workforce’s knowledge and skills and the quantity and quality of the capital, technology and infrastructure that they have to work with, said American economist Janet Yellen.

The Philippines suffers from unemployment and poverty because of poor infrastructure.

In a report by academic Richard Javad Heydarian for Forbes Magazine, the Japan International Cooperation Agency (Jica) found that traffic congestion in Manila, caused mainly by poor infrastructure, led to losses of about P2.4 billion in 2012, and could triple by 2030.

“Since 2011, the Philippines has broken out of its historically mediocre growth pattern to feature among the fastest growing nations in the [Southeast Asian] region,” said Heydarian. “But the country’s growth has been shallow and far from comprehensive, leaving high levels of unemployment, poverty and hunger relatively untouched.”

“Infrastructure is clearly the country’s Achilles’ heel.”

Thus, President Duterte initiated the “Build, Build, Build” (BBB) Program, which seeks to accelerate infrastructure spending and develop industries that will yield robust growth, create jobs and improve the lives of Filipinos. Public spending on infrastructure projects is targeted at P8 to 9 trillion from 2017 to 2022.

Key infrastructure projects under the BBB Program include: (a) the Subic-Clark Railway; (b) the North-South railway projects connecting Los Baños, Laguna to Tutuban, Manila and Clark Freeport in Pampanga; and (c) a 1,500-hectare industrial park in Clark, Pampanga; and (d) an expanded Clark International Airport also in Pampanga.

Other projects were: (a) four energy facilities; (b) 10 water resource projects and irrigation systems; (c) five flood control facilities; and (d) three redevelopment programs.

Finance Undersecretary Grace Karen Singson said that proposals for public-private partnerships to implement infrastructure projects, particularly unsolicited proposals from the private sector, are most welcome.

Unsolicited proposals should involve projects that: (a) address public need; and (b)(i) involve a new concept or technology; or (ii) are not included in the government’s list of priority projects. These proposals are subject to comparative bidding or the Swiss Challenge, wherein the original proponent exercises his right to match the subsequent offers of other proponents for the same project.

In this regard, in Asia’s Emerging Dragon Corp. v. DTC, the Supreme Court recognized the Swiss Challenge under the implementing rules and regulations of the Build-Operate-Transfer Law, in which the original proponent exercises his right to be awarded the project should it be able to match the lowest or most advantageous proposal within 30 working days from notice.

Furthermore, an unsolicited proposal entails a new concept or technology when: (a) it demonstrates its ability to, among others, significantly reduce implementation of construction costs, accelerate project execution, improve safety or reduce costs of facility maintenance and operations; (b) it involves a process for which the proponent or any member of the proponent consortium possesses exclusive rights, either worldwide or regionally; or (c) it involves a design, methodology, or engineering concept for which the proponent or member of the proponent consortium or association possesses intellectual property rights.

Meanwhile, solicited PPPs, which are projects in the government’s priority list, must comply with the public bidding process and receive government support not exceeding 50 percent of the total project cost.

The Supreme Court held in Lagoc v. Malaga that competitive public bidding aims to: (a) protect the public interest by giving the public the best possible advantages through open competition; and (b) avoid suspicion of favoritism and anomalies in the execution of public contracts. It abides by three principles, namely: (a) offer to the public; (b) an opportunity for competition; and (c) a basis for an exact comparison of bids.

“Human rights to me means giving Filipinos, especially those at the society’s fringes, a decent and dignified future through social and physical infrastructures necessary to better their lives,” Duterte said in his State of the Nation Address on July 23.

Much, however, remains to be seen with regards to the progress of his BBB Program.

Senator Sherwin Gatchalian filed Senate Resolution No. 759, seeking to review the status, sustainability and risks of the BBB Program. Said Gatchalian: “There is a need to closely monitor the debt obligations and modes of financing incurred and adopted by the Duterte administration… to ensure transparency, accountability and prudent use of loans and other financing methods utilized by the government.”