Albay Rep. Joey Sarte Salceda predicts a strong Philippine economic takeoff in the next few years, backed by ambitious policy reforms and massive infrastructure projects worth trillions of pesos that will attract more investments to the country
The lawmaker, a noted economist, told media the long desired economic surge will be pushed further by the confluence of factors including the expansion of the country’s gross domestic product (GDP) and the single-mindedness of President Duterte’s infrastructure team and its sound strategies.
He said a 5.5% infrastructure to gross domestic product (GDP) ratio (6.3% if all capital outlays ara accounted for), should underpin a 9-11% GDP growth rate. The BUILD BUILD BUILD Philippines projects alone will hike infrastructure spending to P1.84 trillion in 2022 from P858 billion in 2017, or from 5.4% to 7.3% of GDP under the Dutertenomics model which would have a simulated impact of 9-11%, much higher than the current official forecasts.
Salceda pointed out that the GDP usually spikes in the third year of a President’s administration as reforms kick in and government programs gain traction. In 2004, the third year of President Gloria Arroyo’s first term, GDP reached 8.2%. GDP also expended by 7.9% in 2013, the third year of President Noynoy Aquino’s term. The economic take off in both cases, however, was thwarted by the global financial crisis during the period which compelled the government to underspend.
He noted, however, that the single-mindedness of Duterte’s infrastructure team to move infrastructure has ensured a creative a programming strategy characterized by phased operability, new alignments to reduce right-of-way (ROW) issues and greater resource employment.
With the President’s political will and a cohesive team for project execution – the Department of Finance, on the financing side; the Department of Transportation and the Department of Public Works and Highways, on the investing side; and the Department of Trade and Industry, on the incentive and promotion side – he added, infrastructures have become the vehicle for new investors.
“It’s different this time with President Duterte poised to strongly push the second half of his administration,” he said, noting Dutertes frustration over this year’s budget delay.
Salceda said the economic takeoff will be sustained into 2022 by massive infrastructure projects worth over P24 trillion, among them: the ‘Build-Build-Build’ Philippines, implemented from 2017-2022 with P8.13 trillion budget; the Public-Private Partnership (PPP), P6.40 trillion, P750 billion of which has already been approved; Clark Development, P1.40 trillion. “Poor infrastructure” has been perennially cited as the top disincentive for both Filipino and foreign investors.
“Policy reforms will sustain the momentum and are likely to accelerate with the administration’s super-majorities in the Senate and the House. Under House rules, bills approved on 3rd reading in the past Congress would require only one hearing before going to plenary,” he explained.
This will pave the way for the smooth passage of the following bills: the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO), crafted by Salceda himself; and amendments to the Public Service Act, Retail Trade Liberalization, Foreign Investments Act, the Fiscal Regime for the Mining Industry, National Valuation of Service and Capital Income and Financial Taxes. Other bill including the National Transportation Act. PPP Modernization and Collective Investment Scheme which are all designed to boost investments are likewise seen to smoothly pass Congress.
Salceda said the government’s adopted phased operability, new alignments and increased resource employment will also expedite the completion and partial or full operation of critical infrastructure including the Metro Subway – 3 stations (Tandang Sora, Quirino Highway and North Avenue) of the 15 targeted for operations by 2022; PNR South (up to San Pablo City by later 2021 of its Manila to Sorsogon stretch); MRT 7 (up to 11 of its 14 station from North Ave to San Jose, Bulacan); Clark- Tutuban Railways (up to 16 of its 36 stations by 2022); LRT Cavite (up to 5 of 8 stations of the 11-km line).
Many other big projects are lined up under ‘Build, Build, Build’ including the on-going Metro Manila Subway Project – P356.96 billion; PNR North 2 (Malolos to New Clark City Rail – P211.43 billion; PNR South Commuter Line (Tutuban to Calamba – P124.14 billion; PNR South Long Haul Project alignment – P175.1 billion; Mindanao Rail Project – P35.275 billion; Bulacan Aeropolis – P735.64 billion; Bicol International Airport – P4.798 billion;
Davao International Airport – P48.873 million; Laguindingan Int’l Airport – P42,748 million; Bataan – Cavite Interlink Bridge – P170 billion; South Luzon Expressway Toll Road 4 (PPP) – P13.1 million, Quezon-Bicol Expressway – P87.296 million; and the nationwide island provinces link bridges costing P200.74 billion; Piguiaman Bridge – P400 million; Pangil Bay Bridge – P,375.34 million; Plaridel Bypass Arterial Road P5.26 billion;
Davao City Expressway – P25.625 million; Davao City Bypass – P25.849 billion; and the Rehabilitation of the Agus-Polangui (Albay) Hydroelectric Plant Units – (TBD-ODA funded). The New Clark City (NCC), worth P1,214 billion, is at a confluence of industry and agriculture with existing infrastructure and connectivity to Manila and the rest of the country. With favourable location and short distance to Metro Manila, NCC is seen to be the second biggest Metropolis.
These prospects are underlined in the ‘Dutertenomics,’ a 105-page strategy paper Salceda submitted to President Duterte at the start of his administration in 2016. It basically was a plan of action to “create mass middle class and lift five million families over the poverty hurdle… partly to catch up with the fast growing regional peers, but more to break the social dysfunction and increase people’s confidence on the government and the system.”
In the private sector, ten big corporations are seen to contribute to the country’s economic development with capital expenditures estimated at P1.048 trillion in 2019 – PLDT, P70 billion; Metro Pacific Investment Corporation, P P100 billion; Aboitiz, P81 billion; Ayala Group, P262 billion; SM Investment Corp., P140 billion; Filinvest Land, P32 billion; DMCI, P31 billion; Megaworld, P70 billion; San Miguel Corp., P228 billion; and PAL, P34 billion.
The PPP Projects Pipeline, as of June 2019 has a total of 22 projects (unsolicited) worth P 6,539,465.84; 2 approved by NEDA Board — Bulacan Airport, P735,634 and another project worth P5,612.41; and, six more for ICC approval.
Salceda said other requirements for an economic takeoff have been laid out and consistently reaping good results, among them policy reforms previously approved and being implemented, yielding dividends to the masses, including 1) Poverty incidence reduction to 16.1% from 22,2% in 2016, lifting five million Filipinos from poverty (the target is 10% by 2022);
2) Creation of some 2.6 million jobs since 2016, lower the annual average than the previous administration but the biggest story is the reduction in underemployed, which has fallen by 1.38 million, the biggest percentage decline of 3.8%; and 3) of the 480,000 new jobs created in the first half of 2019, some 207,000 came from the construction industry, 863,000 from plant operators and assemblers, 247,000 from tourism, and 380,000 from logistics.