IMF: Infra buildup to dictate PH’s poverty reduction success
The Philippines would be able to achieve fast its poverty-reduction goal if the Duterte administration would be able to deliver on its “Build, Build, Build” infrastructure program, the International Monetary Fund (IMF) said.
In a report titled “The Philippines: A Good Time to Expand the Infrastructure Push,” the IMF said
While the Philippines was among Asia’s best performing economies in recent years, the country “faces constraints from its outdated and insufficient infrastructure.” To highlight the problem, it cited a report from traffic navigation app Waze that plying just one kilometer within Metro Manila would already take around five minutes by car.
These challenges could prove detrimental to the country’s goal of becoming an upper middle-income country and reduce poverty rate to just 11 percent by 2022 from 16.6 percent in 2018.
“To tackle the issue, the Philippines increased spending on roads, bridges, air and sea ports, and other large-scale projects in recent years. Public infrastructure investment rose from an average of 3 percent of GDP (gross domestic product) during [the period of] 2011 to 2016 to over 5 percent in 2018, with the target of raising the ratio to over 6 percent by 2022. The government’s ‘Build, Build, Build’ program includes large projects that address major bottlenecks, focusing on transportation, water resources, and energy,” the IMF noted.
The expanded pipeline of 100 flagship “Build, Build, Build” projects worth a total of P4.3 trillion included 73 transport and mobility projects worth P3.9 trillion; 10 water projects (P163.4 billion); nine urban development and renewal projects (P133.4 billion); six information and communications technology (ICT) projects (P59.4 billion); and two power projects (P20 billion), presidential adviser for flagship programs and projects Vivencio B. Dizon told President Duterte during last week’s Cabinet meeting.
Dizon said almost half or 49 of the flagship projects worth P2.3 trillion would be financed through official development assistance (ODA) or loans and grants from bilateral partners such as China, Japan and South Korea and multilateral lending institutions.
Money from tycoons’ pockets would roll out 29 big-ticket projects worth P1.8 trillion via public-private partnership (PPP), while the remaining 22 projects (P167.9 billion) would be funded by the national budget, Dizon said.
The bulk or 56 of the projects are expected to be completed before Mr. Duterte steps down in 2022. At present, 34 projects worth P631.7 billion are already ongoing implementation; 44 (P2.9 trillion) will begin construction in the next six to eight months; 15 (P479 billion) are in advanced stages of approval; and seven (P187.4 billion) are undergoing feasibility studies.
The IMF supported the government’s move to tap more PPPs for “Build, Build, Build,” saying it “could help in executing the infrastructure investment push as long as financial risks to the government are well-managed.”
Moving forward, the IMF said the Philippines could further speed up its infrastructure buildup once the public procurement process was strengthened to not only manage costs but also to reduce corruption risks. It added domestic projects should be opened up to greater foreign participation. INQ
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