A total of 64 big-ticket projects ranging from major road networks, railway systems and bus rapid transit systems to airport and seaport modernization are either for implementation or in the pipeline as part of the Duterte administration’s envisioned “golden age of infrastructure.”
Another 15 ongoing projects are being implemented by the Department of Public Works and Highways (DPWH) that are either locally funded, with Official Development Assistance (ODA), or through Public-Private Partnership (PPP) projects.
These ongoing projects include the Mandaluyong Main Drainage Project (Phase II); Central Luzon Link Expressway, Phase I, Tarlac-Cabanatuan, Nueva Ecija; Integrated Disaster Risk Reduction and Climate Change Adaptation Measures in the Low Lying Areas of Pampanga Bay; Tarlac-Pangasinan-La Union Expressway (Binalonan-Rosario Section), Flood Risk Management Project (FRIMP) in Cagayan de Oro River and the Sen. Gil Puyat Ave.-Paseo De Roxas / Makati Ave. Vehicle Underpass Project.
According to DPWH Secretary Mark Villar, all these projects will significantly boost growth and raise productivity and competitiveness.
The Department of Budget and Management (DBM) projects the national government to raise the infrastructure budget from P552 billion to P1.470 trillion by 2022, or from 3.5 to 5.7 percent of the Gross Domestic Product (GDP).
In the same period, the total infrastructure budget–both national and local–is projected to grow from P861 billion in 2017 to P1.832 trillion by 2022, or from 5.4 to 7.1 percent of GDP.
“The significant increase in the infrastructure budget will be used to fund ongoing and proposed major infrastructure projects, which are vital for sustaining high and inclusive growth,” Villar said.
The 64 projects for implementation or in the pipeline are broken down as follows: 20 involving road construction and improvements; two involving bridge construction and reinforcements; four flood control projects; two dams; one road transport IT infrastructure project; 23 involving rail systems; seven airport development projects; two transport terminals; and three bus rapid transit systems.
Besides its current projects, the DPWH is also set to either oversee or implement 10 infra projects in Metro Manila and Mindanao. These are the: Bonifacio Global City-Ortigas Center Link Road Project; UP-Miriam-Ateneo Viaduct along C-5/ Katipunan; Metro Manila Priority Bridges Seismic Improvement Project (Guadalupe Bridge and Lambingan Bridge; Widening/Improvement of Gen. Luis St.-Kaybiga-Polo-Novaliches; Cavite-Laguna Expressway; NLEX-SLEX Connector Road; Metro Manila Interchange Construction Project VI; Davao City By-Pass Construction Project (South Section (Road) and Center Section (Tunnel); Panguil Bay Bridge, and Phase 1 of the Metro Manila Flood Management Project.
The Department of Transportation (DOTr), on the other hand, has awarded 6 PPP projects and is either bidding out or about to bid out 10 PPP projects, according to DOTr Secretary Arthur Tugade:
The awarded PPP projects are the Integrated Transport System (ITS) Project: South Terminal; Integrated Transport System (ITS) Project: Southwest Terminal; LRT Line 1 Cavite Extension and Operations and Maintenance; Contactless Automatic Fare Collection System; Mactan Cebu International Airport Project; and MRT Line 7.
PPP projects that are either undergoing or about to undergo bidding are the Development, Operations and Maintenance of Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) Airports; LRT Line 2 Operations and Maintenance; Road Transport Information Technology Infrastructure (Phase II); LRT Line 6; Philippine National Railways – South Line (previously, the North-South Railway Project – South Line); and NAIA Development.
The DOTr, through a combination of ODA and PPP, is implementing and developing a total of 23 rail projects which will greatly expand the country’s rail system from the current 77 kilometers to over 1,750 Km.
The 10 ongoing rail projects include the following: PNR North (Manila-Malolos), PNR South Commuter PPP Project (Manila-Los Banos), PNR South Long Haul PPP Project (Los Banos-Legaspi,Matnog,Batangas Port), Line 1 Cavite Extension PPP Project (Baclaran-Niog), Automated Fare Collection System PPP Project (Beep Card), Line 2 O&M PPP Project, Line 2 East Extension (Santolan-Masinag), Line 2 West Extension (Recto-Pier 4), Line 6 PPP Project (Niog-Dasmarinas), Line 7 PPP Project (San Jose Del Monte-North EDSA).
Another 13 rail projects are being developed by DOTr.
These include the following: Mindanao Railway (Circumferential), Cebu Railway (5 lines), Panay Railway, Line 4 (Taytay-Manila) PPP Project, Line 5 (Pasay-Makati-Taguig) PPP Project, Line 8 (Quezon City-Manila) PPP Project, PNR North Phase 2 (Malolos-Clark), Mega Manila Subway Project, Subic-Clark Railway.
Aside from extensive rail development, the DOTr is also implementing at least three Bus Rapid Transit (BRT) systems, establishing 77 km of segregated busways and improving pedestrian and bikeway facilities.
These include the Cebu BRT, the Quezon Avenue BRT, and the Central Corridor (EDSA) BRT. Several other BRT systems and corridors are also currently being studied by DOTr.
Alongside these projects, there are 12 other DPWH projects in the pipeline.
These include the Panay-Guimaras-Negros Link Project; EDSA-Taft Flyover; Central Luzon Link Expressway, Phase II, Cabanatuan-San Jose, Nueva Ecija; Flood Protection Works in the Marikina River including Retarding Basin; and the Dalton Pass East Alignment Alternative Road Project.
Another six big-ticket projects funded through PPPs are also either being proposed by the DPWH or already in the pipeline.
These include the R-7 Expressway, Manila Bay Integrated Flood Control, Coastal Defense and Expressway, and the Laguna Lakeshore Expressway Dike.
DBM Secretary Benjamin Diokno said the incremental revenues that would be raised from the first package of the Department of Finance (DOF)-proposed Comprehensive Tax Reform Program (CTRP) amounting to some P163 billion in 2018 is consistent with the planned increase in the budget deficit from 2.7 percent of GDP in 2016 to 3 percent of GDP beginning 2017.
The first package of the CTRP was submitted by the DOF to the Congress last Sept. 26.
Finance Secretary Carlos Dominguez III said the DOF welcomes the recent statement of Rep. Dakila Carlo Cua, who chairs the House ways and means committee tackling tax reform, that the first package would be approved by his panel in January this year.
In the medium-term, Dominguez said tax reform is expected to help reduce the poverty rate from 21.6 percent in 2015 to 14 percent in 2022, lifting some six million Filipinos out of poverty, and helping the country achieve upper middle income country status, with the per capita gross national income increasing from $3,550 in 2015 to at least $4,100 by 2022, which is where China and Thailand are today.
If this momentum is sustained, the country would be well on its way to becoming a high-income economy by 2040 with a per capita gross national income of a least $12,000, or where Malaysia and Korea are right now, he added.
Package One of the CTRP seeks to lower personal income tax rates, broaden the Value Added Tax (VAT) base, and increase the excise taxes on oil products and automobiles.
The lowering of personal income tax rates, a promise that President Duterte made during the 2016 poll campaign, will increase the take-home pay of workers and make our tax rates more competitive, Dominguez said.
A broader VAT base will level the playing field and reduce massive leakages, while higher excise taxes on oil products and automobiles will improve the progressivity of the tax system as richer households consume far more of these products, he said.
“Meanwhile, to protect the poor and vulnerable sectors, highly targeted transfers and subsidies will be provided as part of the ramp up of social spending from 37.3 percent of the 2016 budget to 40.1 percent of the 2017 budget,” Dominguez said.
According to a report quoting BMI Research, sustaining the country’s high growth path is dependent on the Duterte administration’s ability to roll out big-ticket infrastructure projects.
Also, the Oxford Business Group has cited a November report of ratings agency Standard & Poor’s that said the Philippines was a top performer in Southeast Asia in 2016 partly because of an expansionary fiscal policy that emphasizes public infrastructure.
Other institutions have also said the Philippines can sustain its high growth of above 6 percent–and thus its status as one of Asia’s fastest growing economies–provided that the Duterte administration delivers on its commitment to accelerate spending on infrastructure.
These private and multilateral institutions include the International Monetary Fund, World Bank, Asian Development Bank, Fitch Ratings, S&P Global Ratings, Nomura, First Metro Investment Corp. (FMIC), Colliers International, Nordic Business Council of the Philippines (NBCP), Philippine Chamber of Commerce and Industry (PCCI), Employers’ Confederation of the Philippines (ECOP), Goldman Sachs, Bank of the Philippine Islands (BPI), Standard Chartered Bank, Hong Kong and Shanghai Banking Corp. (HSBC), Sun Life Asset Management Co., AB Capital Securities, Lamudi PHL and the Management Association of the Philippines.