Phl infrastructure 2nd worst in ASEAN

MANILA, Philippines - The state of infrastructure in the Philippines is the second worst among countries in the Association of Southeast Asian Nations (ASEAN), the Philippine Institute for Development Studies (PIDS) said on Monday, citing a report from the Global Competitiveness Report 2012-2013.

“In the Global Competitiveness Report 2012-2013 of the World Economic Forum, the Philippines is ranked 98th among 144 countries in terms of quality of overall infrastructure. Philippine infrastructure is worse than Cambodia’s,” Dr. Adoracion Navarro, senior research fellow at PIDS said.

The Philippines ranked 120th in port infrastructure (120th) and air transport infrastructure (112th), way below Cambodia's 69th and 75th place finish in port and air transport, respectively.

Singapore led ASEAN economies by ranking second overall, followed by Malaysia (29th), Brunei Darussalam (43rd), Thailand (49th), Cambodia (72nd) and Indonesia (92nd). Vietnam (119th) placed behind the Philippines while Laos and Myanmar were not on the list.

Navarro said the poor state of the country's infrastructure is due to the underinvestment in the sector. In 2012, only 11 percent of the total appropriated budget for infrastructure was spent.

She also pointed out the decreasing reliance of the country on official development assistance (ODA) which finances infrastructure. In 2012, the amount of ODA loans for infrastructure was more than $5 million but lower than the $6 million in 2008.

PIDS noted that as of this year, there are 21 projects in the pipeline under the public-private partnership program. Required investments in 18 of these projects are projected at $5 billion and three of the 21 projects do not have cost estimates yet. 

Navarro said investors should take advantage of the opportunity given the liquidity of the financial market, while the government could facilitate the creation of credit enhancements for infrastructure bonds that can be issued by private issuers.

She said the government should also organize a group of experts from the public and private sector to formulate clear mechanisms and an institutional setup on using bank resources for infrastructure financing.