The\nDuterte government is allotting Php158.2 billion in 2021 for 16\ninfrastructure flagship projects (IFP). The government is\nprioritizing IFPs in the belief that this will stimulate economic\ngrowth.<\/p>\n\n\n\n
The\ngovernment recently unveiled its updated IFPs\nlist as of August 2020. But are these\nprojects really what will bring economic recovery while the nation\ngrapples with a crisis-stricken public health system and economic\ndecline?<\/p>\n\n\n\n
Php158\nbillion for IFPs<\/strong><\/p>\n\n\n\n The\ngovernment is allocating Php158.2 billion of the proposed 2021 budget\nfor IFPs. This is for 16 infrastructure projects under the Department\nof Public Works and Highways (DPWH), Department of Transportation\n(DOTr), Department of Information Communications and Technology\n(DICT) and the Philippine Statistics Authority (PSA). \n<\/p>\n\n\n\n The\nbiggest IFP project in the 2021 budget is the North-South Commuter\nRailway System which will be funded with official development\nassistance (ODA) from the Japan International Cooperation Agency\n(JICA). In 2021, the North-South Commuter Railway will get Php58.6\nbillion, Php51.5 billion of which is from JICA with the remaining\nPhp7.1 billon from the Philippine government.<\/p>\n\n\n\n The\ngovernment is also allotting Php34.6 billion in 2021 for Phase 1 of\nthe Metro Manila Subway which is another ODA project from Japan. The\nsubway is projected to run three stations from Quirino highway,\nTandang Sora and North Avenue by 2022. The line is some 5.9\nkilometers long which is around a 15-minute drive or a 30-minute bus\ncommute. \n<\/p>\n\n\n\n The\nthird largest IFP in the 2021 proposed budget is the Ambal-Simuay\nRiver and Rio Grande de Mindanao River Flood Control Project worth\nPhp16.8 billion and funded by ODA from China. Php5.1 billion of the\nproject cost will come from the Philippine government. \n<\/p>\n\n\n\n The\nconsiderably huge ODA funding for these projects are actually tied\nloans. This means that the projects should contract companies that\nare linked to the donor country. These foreign corporations partner\nwith local oligarchs. The contractor for\nthe North-South Commuter Railway project\nis a\nconsortium of\nthe Consunjis\u2019 DMCI\nHoldings and Taisei Corporation of\nJapan. The\nMetro Manila Subway Project Phase 1 is a joint venture of Shimizu\nCorp., Fujita Corp., Takenaka Civil Engineering Co. Ltd., with\nthe Yuchengcos\u2019 EEI Corp. as its contractor. \n<\/p>\n\n\n\n Contractors\nare not the only Japanese components of the Metro Manila Subway\nProject. The subway also needs Tunnel Boring Machines (TBM) to dig\nthe underground route of the subway but the Philippines doesn\u2019t\nhave the technology for these. Hence, JIM Technology Corporation\u2019s\nfactory in Tsurumi Prefecture, Japan was contracted to manufacture\nthe TBMs to be used. \n<\/p>\n\n\n\n The\ninfluence and interest of Japan in these huge transport projects is\nconspicuous. The Japanese government produced the Mega-Manila and\nGreater Capital Region (GCR) transport development plans in 2014 and\n2015 that recommended these projects as well as produced the\nfeasibility studies justifying them. Japan is providing the loans to\nfinance them which will be spent\non Japanese contractors building the projects as well as selling the\nmachinery, equipment and materials that will be used.<\/p>\n\n\n\n Meanwhile,\nthe China ODA-funded Ambal-Simuay Flood Control project has yet to\nname a contractor but it is expected to be a Chinese contractor. In\nrecent China ODA-funded projects, the Philippine government waited\nfor the Chinese government to submit a list of qualified Chinese\ncontractors. ODA also comes with\ninterest and commitment fees that add to the total cost of the\nprojects. Of the Php152 billion worth of ODA projects, government\u2019s\ncounterpart is Php28.4 billion.<\/p>\n\n\n\n The\ngovernment argues that these road infrastructures have a multiplier\neffect on the economy \u2013 they will generate jobs especially in\nconstruction and benefit people and businesses by transporting goods\nand services more efficiently, leading to improved returns and thus\neconomic growth. \n<\/p>\n\n\n\n While\nthese seem obvious, there are actually deeper considerations in play.\nThe first is to ask if the benefits are really large enough to\njustify the cost of financing and deeper indebtedness. The second,\nespecially with the pandemic at hand, is if these projects are really\nmore socially urgent and necessary. There are good reasons to at\nleast cast doubt on this. \n<\/p>\n\n\n\n It\nis plausible that expensive railway, subway, and flood control\nprojects are not as important for social relief and economic recovery\ncompared to more hospitals and medical facilities. Building the\nlatter will be more crucial in ushering the country\u2019s COVID\nand non-COVID-stricken workforce back to health. Especially amid the\neconomic slowdown, much transport infrastructure is likely to have\nbecome secondary to pouring assistance into households and producers\nexperiencing the shocks of economic stoppage. Such aid would more\ndirectly bring back people\u2019s capacity to consume and of enterprises\nand farms to produce.<\/p>\n\n\n\n With\nmore rational priorities in place, it is up to the government to\nnegotiate with ODA funders like Japan and China about our country’s\nmore urgent needs. If these ODA funders are really keen on ODA being\nfor development then maybe the Philippines shouldn’t be so afraid to\nhold them up to that intent.<\/p>\n\n\n\n What\nis more important now<\/strong><\/p>\n\n\n\n The\ngovernment expects to pump prime the economy through IFPs, but it\noverlooks many important things that need to be prioritized in the\nface of a grave pandemic. While infrastructure spending may lend a\nfew kicks for the economy to edge forward, the public health crisis\nfirst needs to be solved. Social protection for the most vulnerable\nsectors and support for small businesses also need to be ensured for\nthe economy to genuinely gain momentum towards inclusive recovery.<\/p>\n\n\n\n The\nPhilippines has breached 300,000 cases yet\nthe Department of Health (DOH) has been reduced to tallying COVID\ncases instead of leading the fight against the pandemic. The proposed\ninfrastructure budget in 2021 is worth Php1.1 trillion but the\nproposed budget for health is only Php212 billion. The IFPs\nlist boasts\nof a Virology Institute under the Department of Science and\nTechnology (DOST), but it is not yet included in the 2021 proposed\nbudget of the said department. \n<\/p>\n\n\n\n The\nproposed infrastructure outlay for 2021 only includes\nPhp 2.3 billion for hospitals and health centers compared to roads\nwhich get Php404 billion.<\/p>\n\n\n\n Moreover,\nsocial protection programs for the most affected Filipinos such as\nlow-income families, workers especially in the informal sector,\noverseas workers and the elderly, also need to be continued as part\nof COVID-19 response. However, the government only gives Php454\nbillion for this in 2021 compared to Php534 billion in combined\nBayanihan 1 and 2 and 2020 national budget funds. Support for small\nbusinesses or micro, small, and medium enterprises (MSME) is also\nurgently needed but the government only allocates Php5.2 billion for\nthis.<\/p>\n\n\n\n The\nDuterte administration fails to acknowledge the magnitude of the\nhealth crisis and economic decline currently gripping the country.\nThe 2021 budget affirms the government\u2019s fixation on profit-driven\nnon-solutions. Its priority is still to support the profit of\ntransport contractors, foreign transport construction firms, and\ncorporations in the service and trading-oriented sectors of the\neconomy. Real estate developers in Congress also benefit as property\nvalues in and around the transport infrastructure projects soar,\ngiving them huge windfall benefits.<\/p>\n\n\n\n Recovery\nfor confidence<\/strong><\/p>\n\n\n\n The\nBangko Sentral ng Pilipinas\u2019 (BSP) latest report on consumer\nconfidence in the Philippines in the third quarter of 2020 showed the\noverall confidence index dropping to a record low -54.5%, reflecting\nhow more Filipino families see their financial situation worsen amid\nCOVID-19. The government should look\nafter boosting consumer confidence to increase household consumption.\n\n<\/p>\n\n\n\n \nFor this to happen, the Duterte administration\nmust do everything so that Filipinos will: 1) feel prepared to go\nback to work without risking infection or fearing lack of medical\nattention due to an overwhelmed health system; 2) feel secure that\nthey have enough to spend for their households\u2019 most basic\nessentials; and 3) have stable jobs or livelihoods to return to. \n<\/p>\n\n\n\n In short, in the time of COVID, consumer confidence will emanate not from more roadworks and railways but from having adequate health care, sufficient incomes, and production support. These will steadily push the economy up instead of depending on IFPs that would contribute little in a pandemic-struck country.<\/p>","protected":false},"excerpt":{"rendered":" BY JOSE LORENZO LIM<\/p>\n Are these projects really what will bring economic recovery while the nation grapples with a crisis-stricken public health system and economic decline?<\/p>","protected":false},"author":7,"featured_media":10312,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":"","_expiration-date-status":"saved","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[2048,3],"tags":[2350,1169,2199,347,2040,2315,1749,1043,120],"acf":[],"_links":{"self":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/10311"}],"collection":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/comments?post=10311"}],"version-history":[{"count":2,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/10311\/revisions"}],"predecessor-version":[{"id":10368,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/posts\/10311\/revisions\/10368"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media\/10312"}],"wp:attachment":[{"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/media?parent=10311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/categories?post=10311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibon.org\/tl\/wp-json\/wp\/v2\/tags?post=10311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}