Gov’t taps LGUs to roll out infrastructure projects

The national government wants to widen its engagement with local government units (LGUs) to fast-track the rollout of more infrastructure projects under the “Build, Build, Build” program.

Finance Undersecretary Karl Kendrick Chua told participants of the Beijing-based Asian Infrastructure Investment Bank’s fourth annual meeting in Luxembourg during the weekend that the second half of the Duterte administration would prioritize the acceleration of Build, Build, Build, pursue the passage of the remaining packages of the comprehensive tax reform program, open up the economy by amending the antiquated Public Service Act and increasing foreign participation in retail trade, and improve the agriculture sector’s productivity partly by distributing individual titles to land reform beneficiaries.

As far as Build, Build, Build was concerned, Chua noted that the share of government infrastructure spending to gross domestic product (GDP) was already 5.1 percent last year and “we are on track to achieve 7 percent of GDP in three years’ time.”

Chua said infrastructure development would help the Philippines reach economic growth of 8 percent.

To speed up Build, Build, Build, Chua said the government would pursue “hybrid” public-private partnerships (PPPs) wherein the government builds projects and later bids out operation-and-maintenance contracts to the private sector.

The national government also wanted to involve LGUs in identifying and strategically planning projects while upgrading their technical capacity to deliver local infrastructure.

Department of Finance (DOF) officials earlier said the PPP mode was apt in developing local infrastructure, with the agency matching LGUs to private firms interested in these smaller projects.

Chua said Build, Build, Build could also be speeded up by improving preplanning, implementing the national land use plan for proper zoning, and reforming land valuation to resolve conflicts involving right of way.

Last year, Finance Secretary Carlos Dominguez III issued DOF Department Order No. 37-2018 mandating LGUs and the Bureau of Internal Revenue to adhere to international valuation standards.

Dominguez had said the remaining tax reform packages—which included corporate income tax reduction coupled with the rationalization of the fiscal incentives being enjoyed by investors, harmonization of capital income and financial taxes, higher alcohol excise and motor vehicle user’s tax packaged together with lifting of bank secrecy and automatic exchange of information before implementing general tax amnesty—would be pushed in the incoming 18th Congress.

The DOF chief said he was optimistic to pass the entire comprehensive tax reform program by next year.