Infrastructure: The answer, not the problem

The proposed P644 billion budget for the Department of Public Works and Highways under the 2027 National Expenditure Program elicited heavy criticism. As investigations reveal ghost and substandard projects, civil society coalitions, labor groups, business organizations, and some senators strongly complained and questioned the continuous massive allocations for infrastructure and flood control. 

Honestly, we are getting the diagnosis completely wrong. Yes, any government's natural instinct is to pause, review, and re-bid infrastructure projects because of the scandal. However, pausing it is economic suicide. People in the know got it right. S&P Global slashed its country’s outlook to 4.1% for 2026 from 4.4% last year, the World Bank holds at an even more sober 3.7%, and the IMF downgraded growth by 1.5 points for 2026 for one reason all of them agree on: weak investment and a sharp, prolonged pullback in public infrastructure spending.

Actually, our growth slowed down not because we built too much. We slowed down because we stopped building, and when we stop building, everything else collapses.

Remember, when we build a road, we do not just pour cement. We hire hundreds of workers, we order steel from local mills, we rent trucks, we buy fuel and we feed families. That wage circulates to the sari-sari store, to tuition, to jeepney fares. That is private consumption, which drives 70% of our GDP. The IMF said it plainly: the downgrade is compounded by negative base effects from weaker-than-expected public investment and the sharp decline in confidence that follows. When we freeze infrastructure, we do not save money. We destroy that circulation, we lay off workers, we stop cement orders, and we tell investors we are not serious. Kill infrastructure, we kill jobs, we kill demand, we kill GDP. It is that direct.

More importantly though, the key here is not just building infrastructure but the right one.  For instance, according to the Department of Trade and Industry, the cost of logistics accounted for as much as 25 percent of the price of goods as of 2020. It could be higher today. This is significantly higher than the global average of 11% and represents the highest logistics cost ratio in the Southeast Asian region. This is so as our ports are congested, our roads are incomplete, and our cold chain is non-existent. Sadly, an exporter in Cebu pays P15,000 to move a container to Manila while his Vietnamese rival pays half.

Therefore, if we build deep-water ports in strategic areas, the Negros-Cebu-Bohol bridges, the Mindanao Railway, and the Luzon cold-chain backbone, we permanently cut that cost. Lower logistics cost means lower domestic prices, which means lower inflation. It also means foreign direct investment, which is long-term dollars that strengthen the peso without borrowing a single cent.

Remember, investors today do not come for cheap labor. They come for reliable power, water, roads, and internet. The OECD said public investment is expected to recover gradually, but only if we restore credibility. Infrastructure restores that credibility.

Undeniably too, it is infrastructure that makes local food cheaper to produce and move. So that, with strong conviction, we must do three things. First, continue to build, but build with radical transparency. Do not pause, expose. Every project above P50 million must have a live public dashboard which would show, among others, contractor’s name, contract amount, source of funds and completion percentage with drone footage. Put every flood-control project on a blockchain-verified ledger. Corruption thrives in darkness. Punish with jail and lifetime blacklisting, not reassignment.

Second, shift from concrete-centric to competitiveness-centric infrastructure. Prioritize logistics to cut food and transport costs, energy infrastructure to cut power cost through grid interconnectivity and LNG terminals. Enforce a 60-day fast-track for any private unsolicited proposal that reduces logistics cost by 20%.

Third, fund it with private capital, not just sovereign debt. Our banks are liquid. Our conglomerates have cash. Use true public-private partnerships where government takes right-of-way and political risks and private sector takes construction and operational risks

We are at 2.3% growth while our neighbors are at 4% to 5%. We must build our way out-honestly, smartly, and relentlessly. Frankly, infrastructure is not the problem to limit. It is the only solution we have not fully and honestly tried.