Why is the
Marcos administration’s
economic team all-out in
urging the private sector
both here and abroad
to take part in our infrastructure development?
That’s because, as Finance Secretary Benjamin Diokno
explained recently, “infrastructure is front and
center of our growth
strategy.”
At present, the
government has lined
up 194 flagship projects
costing a total P165 billion.
One hurdle is
there’s been longstanding under-investment in
infrastructure that the
economic managers
want to surmount.
G o v e r n m e n t
spending on infrastructure averaged only 2
percent of gross domestic product from 2001 to
2015.
The Marcos
administration now intends to maintain infrastructure spending at
5 percent to 6 percent
of GDP until 2028. This
means a budgetary outlay of between $20 billion and $40 billion yearly.
The govern
ment wants to sustain high
infrastructure investment
through the public-private
partnership mechanism,
particularly in projects related to energy, logistics,
transportation, telecommunications and water resources.
Foreign investors
can actually now participate in a broader range of
industries that ever before,
thanks to economic liberalization measures enacted
by the legislature in recent
years that have opened up
key high-growth sectors to
international participation.
Among these
economic liberalization
measures are amendments to the Retail Trade
Liberalization Act, Foreign
Investments Act and the
Public Service Act that
eased restrictions on foreign investments in the
Philippines up to the point
of full foreign ownership of
a project.
There’s also the
Strategic Investment Priority Plan that grants fiscal incentives to identified
priority industries, projects
and activities under the
CREATE (Corporate Recovery and Tax Incentives
for Enterprises) Act.
The SIPP is the
vehicle under which the
government determines
priority industries and
projects and offers a
simpler and more effective fiscal incentives
system that’s performance-based, timebound, targeted and
transparent.
The Marcos
administration has
made it a top priority to
utilize the PPP to support and complement its
infrastructure drive.
The program
provides ample opportunities for the private
sector to participate in
such sectors as energy,
water, logistics, transportation, agribusiness,
manufacturing, tourism,
health, education and
digital connectivity.
Infrastructure
programs take time to
conceptualize and implement, and require
huge resources that
cannot be drawn from
taxes and revenues
alone.
Public-private
partnerships can be
one way forward for
governments to push
economic growth that
will improve the quality
of life especially of Filipinos living on the edge
of poverty.
