No delay seen in big-ticket infra projects despite virus crisis

By: - Reporter / @bendeveraINQ
/ 04:07 AM March 09, 2020

The Philippines can continue building big-ticket infrastructure as construction materials and equipment had been well-stocked ahead of the COVID-19 outbreak that put a halt to many manufacturing facilities in China, economic managers said.

Finance Secretary Carlos G. Dominguez III last Friday said the Economic Development Cluster would meet Tuesday to take a closer look at the potential impact of COVID-19’s spread on the domestic construction, industry and tourism sectors.


“Right now what we see, the impact of COVID-19 is essentially on tourism and that’s very clear. What’s not so clear is the impact on the productive capacity of our trading partners and the supply chain, and also the demand for our products,” Dominguez said.

Last week, the Manila-based Asian Development Bank said the COVID-19 outbreak could reduce the Philippines’ tourism revenues by $801.4 million to $2.3 billion as China is its second-biggest source of foreign tourists.


Citing anecdotes from businesses, Dominguez said some were already having difficulty sourcing computer parts, while transport service providers were servicing fewer trips—reflecting the outbreak’s impact on both supply and demand.

In the case of the ambitious “Build, Build, Build” program, presidential adviser for flagship programs and projects Vivencio B. Dizon said the factory shutdowns in China have yet to affect the rollout of infrastructure projects.

Of the 100 “flagship” projects in the “Build, Build, Build” pipeline, 46 are being implemented.

Dizon acknowledged that Chinese firms supplied a lot of construction materials such as steel as well as heavy equipment being used to build infrastructure here.

Last year, China was the Philippines’ top source of imported capital and consumer goods.

“I think China is getting better now. In fact, we’ve heard that even areas like Shanghai and some parts proximate to Hubei province are really going back to normal. So hopefully it (COVID-19) will not [affect the implementation of infrastructure projects], but we’re still looking at and discussing with our contractors if there are any effects,” Dizon said.

Dominguez said it helped that local contractors who won bids to build public infrastructure projects had been keeping ample inventory levels.


The finance chief noted that companies in the Philippines usually “stocked up materials way in advance of when they’re required, so you won’t see an immediate effect if there’s a slowdown because there’s inventory here.”

Given the customary practice of domestic firms to keep at least two to three months’ worth of inventory, Dominguez said they could keep operating until May as any slowdown in global production could have started in mid-February when the COVID-19 infection spread rapidly.

“I’m sure the private sector, if they already know there’s going to be a slowdown, then they buy it somewhere else. You have to give some credit to the people in the market that they know what they’re doing and how they manage their inventories,” Dominguez said.

The ADB’s calculations showed the exposure of the Philippines’ value chain to China at about 2 percent of gross domestic product in 2018. INQ

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