The Philippines’ ambitious “Build, Build, Build” infrastructure program is again undergoing a review to prioritize the flagship projects that will yield the biggest impact to revitalize the domestic economy after the COVID-19 pandemic.
Presidential adviser for flagship programs and projects Secretary Vivencio B. Dizon told the Inquirer Tuesday that the Duterte administration’s infrastructure team was “reviewing everything now,” referring to the 100 flagship projects under the expanded “Build, Build, Build” pipeline.
Dizon said that so far, they have yet to make a decision on which specific projects to retain or remove or tweak.
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a television interview on Tuesday that the plan to spend P1 trillion on infrastructure this year was currently being reviewed by the Development Budget Coordination Committee.
“What we are thinking right now is, we have to reprioritize our infrastructure program. We have to give more space to health infrastructure. We have to give more space to digital infrastructure, and those are important in the ‘new normal.’ But we will continue to pursue a lot of the infrastructure program because that is an important element in our recovery,” Chua said.
“We will have to do this while meeting the minimum health standard. Given a smaller fiscal space, though fundable, we will have to select the projects that have the most economic impact in terms of getting us back to precrisis growth rates and employment levels,” Chua added.
While reviewing the pipeline, Chua expressed confidence that “we stand a good chance to completing a lot of the flagship [infrastructure projects], so we will pursue them in the next two-and-a-half years.”
Midway into the Duterte administration last year, the government tweaked the “Build, Build, Build” program to give bigger participation to tycoons with deep pockets via the public-private partnership mode, which earlier took a back seat to projects to be funded by official development assistance (ODA) from China and Japan.
Dizon had said that the Philippines must stick with “Build, Build, Build” just as the stimulus packages of the United States, Malaysia, Thailand and Vietnam against COVID-19 also included massive infrastructure spending.
But Dizon earlier admitted to the Inquirer that it might be more challenging to secure financing from multilateral lenders, bilateral development partners and even the private sector to roll out big-ticket infrastructure as COVID-19 inflicted pain on economies globally.
Of the 100 big-ticket projects under “Build, Build, Build,” 22 projects worth P167.9 billion will be financed by the national budget; 49 projects worth P2.3 trillion by ODA, and 29 worth P1.8 trillion by PPP.
Chua said that “Build, Build, Build,” passing the pending tax reform packages and enjoining more private sector participation in the COVID-19 recovery plan, would allow the Philippine economy to have a “good chance” for a “V-shaped” or quick recuperation postpandemic.
Chua said that the private sector would have “a very big role, because this is a once-in-a-century problem—we didn’t have this since 1918, and the magnitude is much bigger.”
“This requires an all-nation approach to addressing this problem. People who think the government has a solution and a perfect solution for the problem, I think, are not attuned to the reality. This is where the private sector will have to contribute in terms of supplying the right equipment to help the health sector, supplying and facilitating testing. Of course, also making sure their employees are safe when we do resume work. So that’s a lot of work that needs to be done jointly with the private sector,” Chua said.
For its part, Chua said that the government would extend help to the most badly hit sectors, notably the construction and tourism industries.
Given limited resources, Chua disclosed that affected business and sectors would be extended “a combination of targeted and time-bound tax incentives.”
“There will be credit guarantees and there will also be direct subsidies to their workers. Those are the combination of packages that we are ready to offer. But we can’t help everyone—we will have to be very targeted in the way we help, so that it’s also fair,” Chua said.
For Chua, who had lobbied for tax reform when he was still undersecretary at the Department of Finance, the proposed Corporate Income Tax and Incentives Reform Act (Citira) might “consider a slightly longer transition because people and firms have to adjust” post-COVID-19. INQ