A Cabinet-level delegation led by Finance Secretary Carlos Dominguez III and other members of the economic team will visit China on September 27-29 to pitch the Philippines’ planned renminbi-dominated Panda bond offering and the rosy prospects for investments under the country’s fast-growing economy.
Dominguez, along with Secretaries Ernesto Pernia of the National Economic and Development Authority (NEDA) and Benjamin Diokno of the Department of Budget and Management (DBM) will also meet with high-ranking Chinese officials to discuss the progress of the preparations for the Philippines’ big-ticket infrastructure projects that would be partly funded by Official Development Assistance (ODA) from China.
The economic team will meet with Chinese ministry officials on Sept. 27 in Beijing and proceed the following day to Shanghai, China’s financial center, to hold a briefing on the Philippine economy with China’s business leaders.
Dominguez, Diokno and Pernia will be joined by Secretaries Mark Villar of the Department of Public Works and Highways (DPWH) and Vivencio Dizon, president of the Bases Conversion Development Authority (BCDA) in Shanghai for the economic briefing.
Dominguez said the economic team will also spearhead a “non-deal roadshow” to entice potential buyers of the Philippines’ Panda bond offering, which is tentatively scheduled in the last quarter of the year “depending on market conditions.”
The “non-deal roadshow will also be an opportunity to inform potential investors of the rosy outlook of the Philippine economy under the Duterte administration’s massive “Build, Build’ Build” infrastructure program.
The Duterte administration is planning to spend between P8 trillion and P9 trillion on its “Build, Build, Build” program, over the next five years.
Based on NEDA estimates, this unprecedented infrastructure program is expected to generate 106,824 additional jobs this year; 823,696 jobs in 2018; 1,115,999 jobs in 2019; 1,228,963 jobs in 2020; 1,399,463 jobs in 2021; and 1,705,023 jobs in 2022.
While the average rate for infrastructure spending in the past administrations was 2.6 percent of the GDP, the Duterte presidency plans to ramp it up to 5.32 percent of GDP for this year alone with an infra budget of P847 billion.
The Duterte administration plans to gradually increase the public infrastructure budget to 1.2 trillion in 2018; 1.4 trillion in 2019; P1.5 trillion in 2020; P1.7 trillion in 2021; and P1.9 trillion in 2022.
According to Dominguez, the Build, Build, Build program will be funded by a combination of resources from its proposed comprehensive tax reform program (CTRP), foreign development aid and commercial loans.
He said the first package of the CTRP—the Tax Reform for Acceleration and Inclusion Act or TRAIN, which is now pending in the Congress, will serve as the “cornerstone” of the funding for the government’s ambitious infrastructure program.
Last March, the Philippines and China signed agreements on the conduct of preliminary studies for two proposed big-ticket infrastructure projects in the Visayas and Mindanao during the visit of Chinese Vice Premier Wang Yang to President Duterte’s home city of Davao.
Dominguez and China Commerce Vice Minister Fu Ziying, who is also China’s International Trade Representative, formalized the agreement on the conduct of preliminary feasibility studies for the proposed Davao City Expressway and the Panay-Guimaras-Negros Island Bridges Project through an exchange of letters.
Pernia and Minister Fu also signed the Six-Year Development Program (SYDP) that “aims to steer and promote the stable and orderly development of economic cooperation between the two countries.”
The SYDP also aims to “enlarge the scope and enhance the level of cooperation between, and drive sustainable and inclusive socio-economic development in, the two countries,” according to the Department of Finance.