PHILIPPINE ECONOMIC BRIEFING “Accelerating Infrastructure Development”
Infrastructure development remains one of the top priorities of the Philippine Government to help sustain the robust economic performance and the improved confidence level among the international business communities that the country is currently enjoying. As we know, infrastructure development plays a critical role in the growth and competitiveness of the Philippines and its major economic sectors; in reducing poverty, and creating quality employment; and in ensuring the safety of people, communities, properties and livelihood in times of natural disasters and calamities. Given all these, the government is working to enhance the quality, adequacy and accessibility of the country’s infrastructure.
The overall strategy of the government to accelerate infrastructure development is to increase public infrastructure spending from 2.2 percent of GDP in 2012 to at least 5.0 percent by 2016.
The strategies and action plans in the Philippine Development Plan are translated into priority programs and projects under the current Public Investment Program (PIP) being implemented within the medium-term by the national government (NG), government-owned and/or -controlled corporations (GOCCs), government financial institutions (GFIs), and other government offices and instrumentalities.
For 2013-2016, the priority programs and projects for the infrastructure sector consist of 952 projects with total investment requirements amounting to about USD46.69 billion (PhP2.06 trillion), including capital infrastructure projects, both ongoing and proposed.
This slide provides the breakdown for the subsectors until 2016.
Investment requirements for infrastructure development remain huge despite increased public infrastructure spending. Therefore, infrastructure development will be supplemented by private sector investments through Public-Private Partnerships (PPPs).
To optimize public-private partnerships and enhance the country’s attractiveness to private sector investors, the government has reviewed, amended, and approved policies and legal framework involving private sector participation, such as the IRR of the BOT Law (RA 7718) and the JV Guidelines. Reforms in the energy sector have also increased private sector participation. In July 2012, the Energy Regulatory Commission (ERC) approved the feed-in-tariff (FiT) rates to encourage RE developers to invest at the initial stage and hasten RE deployment.
To improve competitiveness and geographic connectivity, the Pocket Open Skies Policy (EO 29) was issued in 2011, allowing foreign carriers to operate unilateral and unlimited traffic rights to airports other than the Ninoy Aquino International Airport (NAIA). Meanwhile, the Common Carriers Tax (CCT) Act (RA 10378) aims to enhance the country’s competitiveness in international travel by encouraging international air carriers to include the Philippines in their primary routes.
Alongside these policies, the government is pursuing the synchronization of planning, programming and budgeting to ensure that the programs and projects are aligned with the country’s developmental goals and outcomes.
Sustaining the economy’s high-growth trajectory requires continued investment in infrastructure to unleash the potentials of many areas throughout the country. Thus, investors are encouraged to participate in the construction and implementation of various programs and projects that have been identified in a number of infrastructure-related roadmaps and master plans approved by the government. Several programs and projects in these roadmaps and master plans have no identified financing yet.
For transport infrastructure, priorities include the implementation of:
• The Transport Infrastructure Development Roadmap for Metro Manila and its Surrounding Areas (Region III and IV-a), to improve coordination among relevant agencies on transport projects in Metro Manila and its environs in the short-term, medium-term, and long-term;
• The Logistics Infrastructure Roadmap for Mindanao, to improve logistics infrastructure for cost-effective linking of Mindanao’s agriculture and fishery production centers to markets within the region, the rest of the country and abroad; and
• The DPWH and Department of Tourism (DOT) Convergence Plan, to provide road access to designated priority tourism destinations under the National Tourism Development Plan (NTDP).
Other approved infrastructure master plans include: The Flood Management Master Plan for Metro Manila and Surrounding Areas and the E-Government Master Plan (EGMP).
In the energy sector, the 2013-2017 Household Electrification Development Plan (HEDP) issued by the Department of Energy (DOE) sets the plans and strategies to attain 86.2-percent household electrification by 2016 and 90-percent by 2017, while the Philippine Energy Plan 2012-2030 targets 100-percent electrification of sitios by 2015.
To promote energy conservation and energy efficient technologies, the Department of Energy (DOE) is implementing various activities under the National Energy Efficiency and Conservation Program (NEECP), while the National Renewable Energy Program (NREP) aims to develop specific RE technologies and help the country triple its renewable energy capacity by 2030.
In terms of basic infrastructure facilities and services, the government is working to provide clean and safe drinking water to 14 million Filipinos; construct additional 87,034 classrooms by end of 2016; provide 262,287 socialized housing units from 2014 to 2016; construct, rehabilitate and upgrade 12,295 basic health care hospitals and facilities from 2014 to 2016; and improve solid waste and wastewater management.
For ICT, the adoption of the Integrated Services Digital Broadcast-Terrestrial (ISDB-T) or the Japanese standard in Digital Broadcasting provides potential investment opportunities for the development of Digital Terrestrial Television (DTT) broadcast infrastructure in the country.
As we accelerate infrastructure development, the government shall continue implementing strategies to improve the country’s business climate and encourage private sector participation through good governance, vital infrastructure support, and policy reforms to facilitate doing business in the country.
