The national budget, multilateral and bilateral development partners as well as the private sector will finance the 100 ‘flagship’ projects worth a total of 4.4 trillion pesos ($86.9 billion) in the expanded ‘Build, Build, Build’ pipeline. AFP

Philippines to revamp ‘Build, Build, Build’

In light of the socioeconomic fallout caused in the Philippines by the Covid-19 pandemic, the Duterte administration’s ambitious “Build, Build, Build” programme may be reconfigured to prioritise health infrastructure and address potential funding issues.

Presidential adviser for flagship programmes and projects Vivencio Dizon told Philippine Daily Inquirer last week that he agreed with Secretary of Finance Carlos G Dominguez III’s earlier pronouncement that the administration would sustain massive infrastructure build-up to facilitate immediate recovery of the domestic economy once Covid-19 has been contained.

“Secretary Dominguez is spot on in saying that public infrastructure will be key in revving up the economy post-Covid-19. This is the single most-powerful tool governments everywhere can employ in restarting the economy after the devastation wrought by the pandemic.

“Having said that, we have to reassess available sources of financing given the resetting of priorities toward the Covid-19 response as well as long-term health care infrastructure because this problem is not going away any time soon and will linger for a long time,” said Dizon.

The national budget, multilateral and bilateral development partners as well as the private sector will finance the 100 “flagship” projects worth a total of 4.4 trillion pesos ($86.9 billion) in the expanded “Build, Build, Build” pipeline.

However, multilateral lenders such as the Manila-based Asian Development Bank, the Beijing-based Asian Infrastructure and Investment Bank (AIIB) and also the Washington-based World Bank and International Monetary Fund are currently prioritising financing for Covid-19 response as borrower-countries worldwide scramble to fight the disease with more money needed to support vulnerable sectors and keep their respective economies afloat.

For its part, the AIIB plans to offer loans to build more health infrastructure across the region, which Dominguez had said the Philippines wanted to tap.

In the case of the Philippines’ bilateral partners in infrastructure rollout such as China, Japan and South Korea, these countries are also grappling with their own domestic Covid-19 outbreaks and may set aside the grant of official development assistance in the meantime.

Dizon said: “We will have to see how our bilateral and multilateral partners will be responsive to our financing needs in the coming weeks and months.”

Even the private sector, which the updated “Build, Build, Build” list gave more projects to participate in through the public-private partnership (PPP) mode, may also be deterred by the losses inflicted by the pandemic on their businesses.

As such, Dizon said they would also have to talk to the private sector and see what their risk appetite would be for PPPs given the enormous toll this has taken on the private sector. Fifteen unsolicited PPP projects to be funded by tycoons’ deep pockets have been included in “Build, Build, Build”.

Dizon nonetheless noted that “the silver lining here is that interest rates are at an all-time low and unlike countries that are highly leveraged, the Philippines has a relatively low debt-to-gross domestic product ratio, which means we have a lot of room to borrow and avail [ourselves] of the cheap financing available and plan a more aggressive response to this.

“A huge part of this response [to the Covid-19 pandemic] is going to be public infrastructure,” he said.

Of the 100 “Build, Build, Build” projects, 46 projects are undergoing implementation and 50 have been targeted for completion by the time President Rodrigo Duterte steps down in 2022.

In a television interview with US business news channel CNBC last week, Dominguez reiterated that the infrastructure budget would be “the last item that we will touch” even as the Bayanihan to Heal as One Act allowed realigning 275 billion pesos in the 4.1 trillion peso 2020 national budget.

PHILIPPINE DAILY INQUIRER/ASIA NEWS NETWORK