Neda Board under Duterte okays projects worth P 5.3T

From July 2016 up to three months before President Duterte steps down from office, the National Economic and Development Authority (Neda) Board that he chairs approved 111 big-ticket infrastructure projects worth a total of P5.3 trillion.

Documents showed that as of March 21, 2022, 93 Neda Board-approved projects with a combined cost of P4.4 trillion were being financed by official development assistance (ODA) or low-interest, concessional loans extended by multilateral banks as well as bilateral development partners.

The biggest infrastructure project whose implementation had been set into motion by the Neda Board was the P873.6-billion North-South Commuter Railway System Project connecting Mabalacat, Pampanga and Calamba, Laguna across a 147.3-kilometer rail system. This project was being financed by loans extended by the Manila-based Asian Development Bank (ADB) and the Japan International Cooperation Agency (Jica).

Thirteen projects worth a combined P102.9 billion were locally financed by the national budget.

Four projects totaling P757.7 billion green-lit by the Neda Board were being undertaken via public-private partnership (PPP) mode, to be financed by tycoons’ deep pockets.

The largest PPP project given the Neda Board’s go-ahead was San Miguel Corp.’s P735.6-billion Bulacan International Airport. The three other projects being rolled out by the private sector were the P15.4-billion Clark International Airport New Passenger Terminal Building; P5.6-billion Clark International Airport Expansion Project (Operations and Maintenance PPP Concession); and the P1.1-billion Davao Food Complex.

In the case of the P64.9-billion Light Rail Transit (LRT) 1 South Extension involving an 11.7-kilometer railway between the existing Baclaran terminal and Bacoor, Cavite, the project was approved by the Neda Board to have hybrid ODA-PPP financing. “The private sector is responsible for the project’s civil works and electromechanical system, and the DOTr-LRTA [Department of Transportation’s Light Rail Transit Authority], with Jica assistance, is responsible for the procurement of rolling stocks and depot construction/expansion,” Neda said.

However, due to the prolonged COVID-19 pandemic, the Neda Board vice-chaired by Socioeconomic Planning Secretary and Neda chief Karl Kendrick Chua wanted to prioritize productive infrastructure spending to not waste money on non-essential projects.

In a resolution this month, the Neda Board blamed the pandemic for “significantly reducing the national government’s fiscal space” — the health and socioeconomic crises it inflicted jacked up the annual debt-to-gross domestic product (GDP) ratio to a 16-year high of 60.5 percent and the full-year budget deficit to a record 8.6 percent of GDP in 2021.

“In the next 10-40 years, Neda projects a P41.4-trillion total cost to the present and future society due to foregone consumption, and reduced physical and human capital investment and returns in 2020 alone. This massive loss is due to stringent quarantine measures and the resulting reduction of productivity from the closure of face-to-face schooling, sicknesses, [and] premature deaths, among others,” the Neda Board had said. The Philippine economy suffered from its worst annual recession in 2020 when GDP shrank by a record 9.6 percent, no thanks to one of the longest and strictest COVID-19 lockdowns in the region.

As such, the Neda Board said the government needed to prioritize public investments in human capital — particularly education and health — as well as infrastructure to not only recover from the long-term scarring effect of COVID-19 but also generate “good” jobs and accelerate economic growth.

Given local government units’ (LGUs) bigger budgets with the implementation of the Supreme Court’s Mandanas-Garcia ruling in full swing this year, the Neda Board ordered national government agencies to no longer endorse, approve, nor finance programs covered by LGU functions under the Local Government Code. The P5.02-trillion 2022 national budget had set aside LGUs’ national tax allotment (NTA) amounting to P959.04 billion, equivalent to 4.45 percent of GDP — a jump from their formerly called internal revenue allotment (IRA) worth P695.49 billion or 3.23 percent of GDP last year. Ben O. de Vera