The Costs of Infrastructure and its Effect on Progress in the Philippines

Sen. Sherwin “Win” Gatchalian has filed Senate Resolution No. 221, which aims to form an inquiry on the challenges of implementing infrastructure projects and assess how to properly undertake them in a prudent manner.

Infrastructure serves as a crucial element and an identifying factor of a progressive nation. It provides a stable network for trade and commerce in the country, which empowers the national economy as a whole. With this, the importance of providing high-quality roads and bridges to the public plays a major role in providing equal opportunities for Filipinos to thrive and achieve success.

To fulfill these goals, the government has continued to increase spending on public infrastructure in order to improve the connectivity of economic hubs and centers in the country. Between 2016 and 2018, the spending for infrastructure increased from P493 billion (2016) to P886 billion (2018), and helped sustain the growth of the economy and its GDP, from 6.7% in 2017 to 6.2% the following year. Many experts had credited this growth to the incumbent administration’s Build, Build, Build program, that launched 75 flagship infrastructure projects aiming to expand investments in the construction and infrastructure sectors, which the government insists will lead to job creation and strengthen connectivity between urban and rural areas. 

In 2019, the infrastructure programs contributed a lower GDP growth rate of 5.6% and had many worried of its sudden slip. This is in part to the many factors that hinder its implementation, which includes the delay of the 2019 budget and the electoral ban of construction activities. Because of these effects, the government has to rely on commitment fees through the Official Development Assistance (ODA) to finalize its projects.

In its data, the National Economic Development Authority (NEDA) indicates that 59 of the 75 identified flagship projects will be funded from ODA, and 19 of these will be sourced from China as of January 31, 2019. These Chinese-backed ODA loans constitute to 25% of the total cost of the 75 flagship projects, which are estimated to be P515 billion.

Despite its promising intentions, the Build Build Build Program has been facing various issues, specifically with its alleged onerous deals with China. These loans are questioned as export promotion of China, rather than welfare development, as most procurement of these loans will be done in China and be performed by Chinese workers.

To clarify the current status on the latest flagship programs and its questionable funding, Sen. Sherwin “Win” Gatchalian has filed Senate Resolution No. 221, which aims to form an inquiry on the challenges of implementing infrastructure projects and assess how to properly undertake them in a prudent manner.

Gatchalian’s resolution states that increased reliance to Official Development Assistance (ODA) loans might lead to strains in government fiscal resources and lessen its ability to respond to any economic downturn. For Gatchalian, these loans deprive work opportunities to Filipinos and deny them of benefiting from the programs they are obligated to pay for as duly taxpayers of the land.

In order to solve the issue and finally provide progress in this endeavor, Gatchalian urged the Senate to conduct a hearing on the matter. He also brought the plan to legislate policy on creating a master plan for infrastructure programs that would consistently sustain spending on proposed projects, which will be beneficial to Filipinos in the long run.

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