‘Flagship P8 trillion infrastructure program at a bottleneck’

MANILA, Philippines — As the government’s ambitious P8-trillion infrastructure program, commonly referred to as Build Build Build or BBB, continues to lag behind targets, analysts are now raising doubts over the Duterte administration’s capability to complete these flagship projects by 2022.

In a recent report by London-based forecasting and advisory services firm The Economist Intelligence Unit, it noted that since BBB was launched in 2017, only two out of 75 projects have been completed.

“Bureaucratic hurdles and a lack of technical expertise are among the reasons for the delay. The focus has now shifted toward a public-private partnership (PPP) model,” EIU said.

In September, President Duterte appointed Bases Conversion and Development Authority president and CEO Vivencio Dizon as his adviser for the flagship infrastructure program. Since his appointment, Dizon has initiated a revision of the list of infrastructure projects. The new list, revealed in early November, comprises 100 large projects, including regional airports and projects in information and communications technology, water, power and urban renewal.

Dizon said some of the projects added to the list are based on unsolicited proposals and others will be tendered under the PPP model.

EIU noted that underdeveloped infrastructure is the Philippine economy’s Achilles’ heel, with persistently low inflows of foreign direct investment (FDI) largely blamed for infrastructure bottlenecks. The World Bank’s Logistics Performance Index for 2018 ranks the Philippines’ infrastructure at 66th out of 160 countries, well behind its regional competitors for FDI: China, Indonesia, Thailand and Vietnam.

It cited, for instance, the significant economic impact from underdeveloped infrastructure which, according to estimates for 2018 from the Japan International Cooperation Agency, the worsening traffic in Metro Manila costs the Philippine economy P3.5 billion daily in missed economic opportunities and unnecessary expenditure related to congestion, up from P2.4 billion in 2014.

“We believe that Dizon’s appointment will lead to more infrastructure projects being executed through PPP, because such projects tend to be implemented more quickly than those financed by the General Appropriations Act (GAA) and official development assistance (ODA). Nevertheless, the shortage of local expertise and skilled workers, as well as red tape, such as constitutional limitations on foreign ownership of public utilities, work in the opposite direction, so there will be no quick fixes to the bottlenecks that plague the infrastructure program,” EIU said.

Even the National Economic and Development Authority (NEDA) has projected that by the end of Duterte’s term in 2022, only 21 of the flagship projects will have been completed.

The flagship infrastructure program was initially meant to be funded through the GAA; 67 percent, PPP (18 percent) and ODA (15 percent). Excise taxes, including those on petroleum products, were raised in 2017 to contribute to the GAA, which led to a prolonged period of high inflation.