Carlos G. Dominguez
Secretary of Finance
Republic of the Philippines
Transport infrastructure is clearly our most urgent need. It immediately contributes to economic expansion and broadens the revenue base of countries. Businesses are able to improve productivity dramatically and households are able to improve incomes with the modernization of transport infrastructure.
Transport infrastructure improves cross-border connectivity, enhancing trade and opening the way to closer economic integration. This is critical among the island and archipelagic economies of Southeast Asia. This is especially urgent in the light of the ASEAN’s effort to build a common market that will encourage investments in industries.
The Philippines embarked on a massive infrastructure program known as the Build, Build, Build, intending to have both immediate and strategic impact on our economic expansion. The 75 flagship projects included in this program all relate to making transport more efficient. They include ports, railways, airports and roll-on, roll-off vessels.
To be sure, strategic infrastructure projects are costly. We are building a strong basis for our infrastructure program by modernizing our revenue systems, pursuing financial sector reforms intending to broaden participation and strengthening our banking system to enable capital accumulation. But we will rely heavily on our development partners for strategic financing support.
Our flagship projects are of long gestation and therefore require long-term financing. The role played by our development partners such as the Asian Infrastructure Investment Bank (AIIB) is indispensable. Our development partners can enable shorter tenors for our key projects and superior cost advantages over commercial financing sources by ensuring longer maturity and more favorable financing terms. It will greatly benefit emerging economies such as ours if our development partners are able to include a grant element of 25% and superior access to knowledge, experience, and technology.
We do expect our development partners to help ensure the best advantage for recipient economies by speeding up processing without compromising the quality of preparation and implementation. We look to the AIIB for more immediate and longer-term financing that will guarantee the success of our infrastructure investment program and the strong expansion of our domestic economies.
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