Philippine Economic Briefing
ASEAN Convention Center, Clark, Pampanga
April 13, 2018
(Greetings)
Welcome to the Clark Freeport Zone. This former American military base will soon be the showcase of the Duterte administration’s economic strategy.
You must be familiar by now with the key components of this economic strategy. It seeks to grow the Philippine economy by 7 percent or better into the medium term. In order to stimulate economic growth, the administration has embarked upon an ambitious infrastructure program that will bring us up to par with our neighbors. Over the next few years, we will undertake 75 strategic projects. 23 of these projects have completed the approval processes and are ready to commence. We intend to complete the approvals process for the rest of the projects this year.
This aggressive infrastructure build-up would not have been possible without the fiscal space created by many years of disciplined management of our revenues and expenditures. The Tax Reform for Acceleration and Inclusion or TRAIN law will complement existing budgetary resources to hasten our infrastructure modernization program. 70 percent of all incremental revenues from the TRAIN will be used to fund the infrastructure program, while 30 percent will be used to expand social services and improve human capital.
The expanded inflow of official development assistance (ODA), strong financing support from multilateral institutions such as the Asian Development Bank (ADB), World Bank (WB) and the Asian Infrastructure Investment Bank (AIIB), as well as bonds floated to take advantage of our investment-grade credit ratings allow us to move from the traditional public-private partnership (PPP) model to hybrid forms of financing our strategic, high-impact projects. These hybrid forms of project financing will, in turn, enable us to undertake the projects quickly and reap their economic benefits early.
The infrastructure projects, with their high multiplier effects on the economy, will attract investments and create jobs. The infrastructure program will stimulate rapid economic growth. By 2022, we expect to dramatically bring down poverty incidence in our economy from 21.6 percent to only 14 percent as we transform our economic development to make it more inclusive.
Clark will be the showcase for this economic strategy. We expect this area to be the growth driver of Central and Northern Luzon. With its excellent airport, this special economic zone sits at the nexus of a network of expressways and, soon, a railway running from here to Manila and Los Banos, as well as another railway that will run from here to Subic. It is ideally suited as a hub for logistics industries, a government center as well as a site for world-class sports facilities. It captures what the Build, Build, Build program aspires to achieve: a coherent national logistics circuit that will support our country’s rapid and inclusive development.
Last year, the Clark International Airport served 1.5 million travelers, over a million of them traveling to or from international destinations. With the construction of the new world-class terminal building, which broke ground last December 2017, Clark International Airport is projected to accommodate eight million passengers per annum. It will help relieve the congestion of the Manila International Airport.
At the core of this Freeport is the New Clark City, which will bring in hundreds of enterprises around a sprawling industrial and real estate development. With rail service to Subic, this entire area will be the hub for food processing that will cater to the international market. The rapid development of the Clark Freeport will help decongest Metro Manila. Likewise, with the recent groundbreaking of the 40-hectare piece of land where the National Government Administrative Center will be developed, the New Clark City will house various backup government centers that will ensure continuous business operations and services in the country at the onset of a natural disaster. The New Clark City will soon be the next big metropolis.
This, truly, is where the future begins. We envision this as the hub of agro-industrial activities as well as the home for cutting-edge technology companies. Clark, in the near future, will be the growth driver for Luzon.
The detailed economic briefing following these introductory remarks will situate the role played by this Freeport in the nation’s overall development.
Thank you and good day
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