Aggressive infra development a must for new government, says report

MANILA, Philippines - The government should not let the elections next year derail ongoing initiatives to upgrade the country’s poor infrastructure which remains a serious threat to the national economy, according to a new report.

Lack of adequate infrastructure is a setback to the country’s growth, and despite the adoption of a more aggressive infrastructure development program, there are concerns that implementation remains slow and that thrusts could change with new leaders on board, according to the paper.

“For an archipelagic nation with high urban population density and heavy reliance on air and water transport, (weak infrastructure network) is a glaring risk to sustainable and inclusive growth,” said the paper, titled “Competitiveness: Sustainable and Inclusive Growth-The Philippines” and published recently by Deloitte.

The report highlighted observations about “the continuing underspending in this critical sector,” adding that among the Asean-5 (Indonesia, Malaysia, Philippines, Singapore, and Thailand), the Philippines had historically spent a lower percentage of gross domestic product (GDP) on infrastructure, which averaged from 1980 to 2009 to just a little over two percent compared to about 5.5 percent among its neighbors.

At the same time, it lauded the current administration’s efforts to increase the budget for infrastructure investment to the equivalent of  four percent of GDP, with the aim to increase it to five percent in 2016.

According to news reports, the Aquino government is proposing a P3.002-trillion national budget for next year. Of this, about P829.6 billion or 27.64 percent will be allocated to economic services, mostly going to transport and communication infrastructure expenditures to realize the  five percent GDP target.

It is also proposed that the Department of Public Works and Highways should receive P391.2 billion to complete the pavement of all national arterial and secondary roads. Among next year’s priorities is the paving of 31,242 kilometers of national roads and making all temporary bridges permanent.

The budget also supports the provision of services by the Light Rail Transits 1 and 2, the Metro Rail Transit, and Philippine National Railways.

However, the paper continued, there are nagging concerns that “improvements aren’t happening fast enough,” citing as example the slow progress in awarding public-private partnership projects in infrastructure development.

The paper underscored the importance of a sustained infrastructure program even with a new administration in place. It noted the role of an efficient infrastructure network in attracting new investors to the country and easing traffic in Metro Manila.

Moreover, infrastructure enhancements will benefit the tourism industry, and connect lagging towns to growth centers and link farms and products to markets. The economy of Mindanao, the country’s poorest region and the one with the lowest road density, is also expected to gain, if lasting peace in the area is achieved.

With so much at stake, the paper said that as the presidential elections approach, it is vital to ensure that the pipeline of critical projects doesn’t come to a complete halt when the leadership changes.