MANILA, Philippines — Amid many exemptions to the month-long Luzon lockdown, the government would like to add one more: infrastructure projects.
The Transportation and Public Works departments are preparing a list of infrastructure projects it want to proceed during the community quarantine, a mitigating effort meant to somehow alleviate the impact of the coronavirus in the local economy.
“There are construction and rehabilitation works that we will ask to be exempted (from the lockdown) from IATF,” Transport Assistant Secretary Goddes Hope Libiran said in a text message to Philstar.com.
IATF stands for the interagency task force against emerging infectious diseases, which groups various agencies including the departments of Transportation, Tourism, and Justice.
Libiran declined to go into specifics, saying only to “wait for specific guidelines” to be issued by the Department of Interior and Local Government, which is spearheading the implementation of the quarantine together with local government units.
Sought for comment, Ibarra Paulino, executive director of Philippine Constructors Association, an industry group, also said the Public Works department “is working on a similar list of projects,” but said he would personally advice against it.
“If the exemption will be granted, then that’s good since our workers need work. But at the same time, you put their safety at risk. My position is to just wait for this one-month period, see if there will be improvement, and then let’s discuss measures,” Paulino said in a phone interview.
Infrastructure on break
The plan to proceed with select infrastructure appears as a bid of the government to continue with its “Build, Build, Build” program, its centerpiece economic policy which in recent years suffered delays due to dragging aid talks with foreign creditors such as China, and last year’s four-month delay in the passage of the 2019 budget.
Things were looking rosier this year with the budget enacted on time, until China was hit by the spread of the coronavirus, resulting into a near economic shutdown that saw factories processing raw materials halt production, and bilateral talks delayed. Over the past two weeks, the global pandemic has begun to be slowly felt in the Philippines.
Budget Secretary Wendel Avisado said late Monday evening the infrastructure program will go on “unhampered” despite the government being preoccupied with containing the virus that has so far infected 142 people, 12 of whom died as of Tuesday evening.
A continuity on capital outlays in Luzon will be crucial. While an initial lockdown in Metro Manila only put 5.7% of infrastructure projects under threat, budget data showed widening the quarantine to the entire Luzon risks stopping 17.8% of infrastructure projects, amounting to P174.5 billion.
The amount only counted projects handled by regional offices of infrastructure agencies like DPWH, and do not include those undertaken by their head offices in the areas, which are also likely to be affected.
In terms of specific projects, in Metro Manila alone, the stoppage is already affecting the rehabilitation of Metro Rail Transit-3, as well as construction of Skyway extension and subway connecting Taguig to the Ninoy Aquino International Airport.
“There will be problems of disruptions definitely. It will be difficult to move around and it would mean hampered delivery of workers and critical inputs for construction,” said Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines.
Growth impact
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., had the same assessment. “There could be slowdown on some infrastructure-related activities as some businesses, government offices, and other institutions have been operating at reduced/skeletal workforces at the very least while some are shut down or working from home,” he said.
In turn, economic growth, which has consistently slowed for the past three years under the Duterte administration, would also take a hit. Last year, gross domestic product slowed to an eight-year low of 5.9%.
“I can initially say that the impact will be significant particularly for Q1 (first quarter) and Q2 (second quarter) economic growth,” Asuncion said.
But for Paulino, the construction industry is ready to take the brunt of “collateral damage” from a work halt in Luzon. “This is beyond force majeure…For now, we are trying to support our members,” he said.