PH targets P698-B infra spending by 2016

Rappler.com
Private sector investments are also urged but players cite challenges

Photo taken from PPP Center website

MANILA, Philippines – The National Economic and Development Authority (NEDA) said the Aquino government eyes a threefold increase in infrastructure spending by the end of its term.

In his presentation at the Arangkada Philippines Forum on Tuesday, February 26, NEDA Deputy Director General Rolando Tungpalan said they are keen on hiking infra spending to P698 billion or 5% of gross domestic product (GDP) in 2016 from P249 billion or 2.6% of GDP in 2012.

“We need to strengthen our planning and implementation. What agencies do throughout the year is carry on what they think are ready-to-go products unmindful of their synergy.

“We need to adopt a coherent transport roadmap. We will pursue institutional and policy reform in policy development and implementation. After this, the most important step is to fast track implementation,” he said.

The NEDA official said this is the reason why for the past 2.5 years of the Aquino administration, the government has been undertaking various measures to speed up infrastructure development.

Among these measures are revisions in the Implementing Rules and Regulations of the Philippines Build Operate Transfer Law, and amendment of the Joint Venture Guidelines.

He added that since President Benigno Aquino III assumed office, the NEDA board has confirmed 61 projects approved by the Investment Coordination Committee. Tungpalan said 70% of these projects are infrastructure-related and amount to P425 billion.

Tungpalan also said the government has undertaken master plans for massive infra projects, including the flood control and high standard highway for Metro Manila.

Private sector spending

He meanwhile urged the private sector to also invest in infrastructure.

However, players in infrastructure-heavy sectors such as power, telecommunications and transportation cited a number of challenges.

Here are quotes from the players:

Power

Ray Cunningham, first vice president for Business Development at Aboitiz Power Corp:

Foreign ownership – “What we don’t understand is why a foreign investor needs to have a 60% Filipino partner. The investment clause in the Constitution impedes the development of investment in the country.”

Electricity rates – “In the Philippines we have one of the highest power rates in the region. The reason why in some countries power rates are low is because the rates are subsidized and that’s counterproductive. Remember, the Philippines is an archipelagic country and so costs for generating power is costlier.”

Open competition – “We really need open competition. We need that to go forward because people are getting impatient.”

Telecommunications

Donald Felbaum, managing director OPTEL Ltd:

Foreign ownership – “We’re handicapped by the 60-40 foreign equity rule.”

Lack of ICT department – “We have to put up a Department of Information and Communications Technology. We’re the only country in ASEAN without a government agency specific for ICT. The telecoms has moved to the back burner and not getting the support there.”

Outdated laws – “Under President Ramos’ in the 90s the Republic Act 7925 telecom policy act framework for deregulation was passed. The law is 15 years old. We need to move toward convergence. It needs to happen to help us stay competitive.”

Satellite – “We have no satellite today. We had Mabuhay satellite before. Today we have to source from Malaysia, Hong Kong or Thailand.”

Transportation

Meneleo Carlos, chairman of Federation of Philippines Industries:

Outdated laws – “We have inherited a lot of conflicting laws and policies from the Marcos regime. We have to push Congress to fix this so we can move forward and benefit from all this development.”

Open skies policy – “We have to have a wider open skies application aside from addressing airport congestion especially in NAIA.”

– with reports from Cai Ordinario and Aya Lowe/Rappler.com

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