Philippines banks on infrastructure push to revive economy from virus

Ralf Rivas
Philippines banks on infrastructure push to revive economy from virus

Alecs Ongcal

'We will use that (infrastructure projects) as one of the main drivers of our economy.... That is where jobs are created,' says Acting Socioeconomic Planning Secretary Karl Chua

MANILA, Philippines – The Philippines is relying on infrastructure projects to revive its coronavirus-stricken economy, with its new chief economist noting that projects with the most impact should be prioritized.

“We will be entering a new normal, and we will have to determine which of the BBB (Build, Build, Build) projects have the maximum impact,” said Acting Socioeconomic Planning Secretary Karl Chua.

Chua echoes the recommendations of Ernesto Pernia, his predecessor who resigned amid the coronavirus crisis.

Pernia previously said in an ANC interview that infrastructure projects should be done during the lockdown, as there is less traffic and physical distancing is supposedly possible during construction.

“We will use that as one of the main drivers of our economy…. That is where jobs are created,” he had said. (WATCH: Rappler Talk: Coronavirus and the economy)

Chua is banking on the multiplier effect of infrastructure or its ability to create jobs and spark economic activity in various industries.

In theory, infrastructure projects spark various activities in surrounding areas, like small stores getting more customers due to more construction workers in the area and construction companies benefiting from higher demand due to public works.

In the last two years, Chua said, infrastructure spending rose to 5% of the country’s gross domestic product.

Despite delayed budget approval in 2019, President Rodrigo Duterte’s economic team was able to ramp up infrastructure spending in the 4th quarter, even resulting in a higher budget deficit.

However, some experts noted that infrastructure projects may not be the best at this time, as the uncertainties brought about by the new normal have likely changed the economic environment.

For instance, IBON Foundation executive director Sonny Africa said in a Rappler Talk interview that tourism-related infrastructure projects may no longer be as feasible as before, as people are less likely to travel even after the pandemic. –

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.