Category : Presentations
Date : November 23, 2016
Title : Presentation of Undersecretary Rolando G. Tungpalan during the PFIC Global Investment Forum
Article : PRESENTATION
ROLANDO G. TUNGPALAN
Undersecretary for Investment Programming
National Economic and Development Authority

Infrastructure for Inclusive Economic Growth:
How important is infrastructure development to economic growth?

PFIC Global Investment Forum
November 22, 2016 | F1 Hotel, Bonifacio Global City, Taguig



Distinguished speakers, guests, participants, ladies and gentlemen, good afternoon.

Thank you to the organizers for this opportunity to share with you the government’s development thrusts, particularly in infrastructure, in the coming years.

Today, as the Economic Managers say, is the Golden Age of Infrastructure in the Philippines. President Rodrigo Duterte has made clear that his administration will keep deliberate focus on developing the regions through connective infrastructure. Having sustained macroeconomic stability and GDP growth in the last several years, the country now needs to aggressively address disparities across regions and sectors so that more Filipinos can participate in and benefit from the growth process.
Just last week, business news were brimming with headlines on the announcement that the Philippine economy has hit its stride as it grew by 7.1 percent in the third quarter of 2016. This beats the median market expectation of 6.8 percent for the period. This growth rate also cements the likelihood of attaining the government’s target of 6.0 to 7.0 percent for full-year 2016.

Moreover, we are the fastest-growing among major Asian emerging economies that have already released data for the quarter. We are higher than China’s 6.7 percent, Vietnam’s 6.4 percent, Indonesia’s 5.0 percent, and Malaysia’s 4.3 percent. India has not yet released their data. But for the fourth quarter, the country only needs to attain at least a 3.4-percent growth to attain the low-end target of 6.0 percent. To reach the high-end target of 7.0 percent, we need to grow by 6.9 percent in the fourth quarter.

In addition, growth forecasts for 2016 have been optimistic coming from international institutions such as the Asian Development Bank, World Bank, International Monetary Fund, Moody’s, and HSBC, among others. We have also read reports that the growth forecasts for 2016 may likely be revised upward following the 7.1 percent growth in the third quarter.

This is indeed promising, but there is still a need to sustain this growth trajectory by making the needed investments in infrastructure. That is why the Philippine government is poised to accelerate annual infrastructure public spending to at least 5.2 percent of GDP next year, and as much as 7 percent of GDP by year 2022.

We are staying true to this promise. The government is ramping up implementation of several previously approved projects, and there are many more projects to come. Under President Duterte’s administration, the NEDA’s Investment Coordination Committee (ICC) has so far approved 17 infrastructure projects amounting to Php368.06 billion. Seven of these projects have already been approved by the NEDA Board last September, and another eight projects related to agriculture, transportation and rural development were also approved this month. These include the EDSA BRT, Plaridel Bypass Road Project, the New Cebu International Container Port Project, the South Line of the North-South Railway Project, and the New Nayong Pilipino at Entertainment City, among others. Allow me to go through some of them in more detail.

One is a Bus Rapid Transit Project, estimated to cost at about PhP37 billion, that will run along the entire EDSA corridor specifically along Monumento to SM Mall of Asia, Ayala Avenue to World Trade Center, Ortigas Center to Bonifacio Global City, and along the NAIA Terminals I, II, III, and IV. The project entails 63 BRT stations and is expected to move around 1.6 million passengers daily. It has an estimated cost of at least PHP37 billion.

The NEDA Board also approved a Road Expansion Project along the General Luis-Kaybiga-Polo-Novaliches route, which will be completed by July 2019. But with a 24/7 work schedule, this can be completed as early as January 2019.

Likewise, the Plaridel Bypass Road Project will upgrade the existing 23-kilometer Plaridel Bypass road by expanding it into a 4-lane national road. It will involve the construction of 10 bridges, 5 overpasses, 1 intersection and 3 toll plazas. This will cost around PHP10 billion, and will take three years to complete.

To add, I am pleased to announce that the Department of Public Works and Highways is now ready to bid out and implement a road project that will connect Ortigas Center with Bonifacio Global City through a bridge that traverses Sta. Monica, Lawton in Bonifacio Global City, and Meralco Avenue in Pasig. This project should decongest EDSA and C-5, and provide an alternative route for motorists.

Also, the Department of Transportation is already in its pre-implementation stage for a Bus Rapid Transit from Manila City Hall to Quezon Memorial Circle. This project is planned to be completed by 2019.

Additionally, we are preparing the final engineering design for the C-6 Road, or the Southeast Metro Manila Expressway Project – a 34-kilometer toll road project that will run through FTI in Taguig City to the Batasan Complex in Quezon City. This is another initiative to decongest EDSA and C-5, costing over PHP31 billion, and expected to be completed by 2021.

Let me emphasize that these project approvals are part of the deliberate effort to use public resources well so that growth will be broad-based and inclusive. We aim to increase expenditure efficiency by linking together the government’s planning, programming and budgeting processes so that public resources can be better channeled to projects that will benefit productive sectors and create more jobs.

Recently, the NEDA and the DBM agreed to set-up the Three-Year Rolling Infrastructure Program, or TRIP to ensure budget support for projects that are in the pipeline.
The TRIP is a modification of the Comprehensive and Integrated Infrastructure Program (CIIP), a consolidated list of all infrastructure programs of the government—only that it puts more emphasis on immediate priorities to be undertaken in three-year periods. This multi-year program for infrastructure will assure us that once an infrastructure program has been planned and rolled out, it will continue to receive funding from the government. This is one of our efforts to synchronize and tighten the link between the programming and budgeting functions of the government for infrastructure projects and programs.
It is important to note, too, that the government now employs a more holistic approach in project planning and programming. We are now guided by master plans and roadmaps, ensuring that there is greater coherence and effectiveness in identifying and programming proposed and approved projects.
These masterplans include the Transport Infrastructure Development Roadmap for Metro Manila and its Surrounding Areas, the Master Plan on High Standard Highway Network Development, the Survey on Mindanao Logistics Infrastructure Network, the Flood Management Master Plan for Metro Manila and Surrounding Areas, the 2013-2017 Household Electrification Development Plan, the National Renewable Energy Program, the Manila Bay Sustainable Development Master Plan, the Philippine Transportation Systems Master Plan, the Water Supply, Sanitation and Sewerage Master Plan, and the National Broadband Plan, among many others.
Just to give you a clearer idea, here are examples of projects included under the Master Plan on High Standard Highway (HSH) Network Development. These projects are the Southeast Metro Manila Expressway Project (C6), North Luzon Expressway East (Phase I and II), South Luzon Expressway Toll Road 4, Central Luzon Link Expressway (CLLEx) Phases I and II, and the Cavite-Laguna (CALA) Expressway Project. This Master Plan is intended to develop an economic corridor by connecting major urban centers to strategic development areas of the southern and northern regions of the country.

Based on the national survey for AmBisyon Natin 2040, among Filipinos’ aspirations is the ability to go to places for daily needs, work, and leisure, it is also the government’s thrust to improve mobility of our people. Filipinos also want access to amenities and job opportunities offered by urban areas but actually want to stay in their respective hometowns. Thus, we want to strengthen connectivity among regions while also developing areas outside the Capital. Therefore, indicative flagship projects, which are major capital outlays in nature, were identified to best represent the solution for achieving the infrastructure outcomes across the country. For these projects, budget would fully be provided, preparation and implementation would be fast-tracked, and progress would be monitored.
One project is the Cebu Bus Rapid Transit project that will run 16 kilometers from Barangay Bulacao Pardo in Cebu City’s south district to Barangay Talamban in the north district. The project costs around Php10.6 billion. The project is currently ongoing, and is expected to be completed by 2019.
Next is the North-South Commuter Railway Project involves the construction of a 37-kilometer narrow-gauge commuter railway from Malolos, Bulacan to Tutuban, Manila using the Philippine National Railway (PNR) Right-of-Way (ROW). It is aimed to improve connectivity and efficiency among urban centers and regional growth hubs in Luzon. Costing PHP117 billion, it is currently under implementation and expected to be completed by 2020.
The Davao City Bypass Construction Project, which is currently under implementation, involves the construction of a two-lane road, a two-kilometer tunnel, and a five-kilometer bridge connecting Davao City in Davao del Sur and Panabo City in Davao del Norte. It costs around PHP16 billion and is expected to be completed by year 2022.
Also, one project we are all excited about is the Mindanao Railway, which will improve connectivity in major growth centers in Mindanao. The project, whose feasibility study is almost complete, involves the construction of modern railroad tracks, operation of state-of-the-art rolling stocks, and terminals in strategic areas where trading posts will be established. The rail will provide for a Mindanao-wide rail network, as seen on the screen. The system will link itself to major ports and other gateways such as in Laguindingan and Cagayan de Oro.

Apart from these flagship projects, we want to enhance connectivity between regions and islands. That is why the government is mobilizing funds for feasibility studies for new projects, one of which is the 27.5-kilometer-long Cebu-Bohol Link Bridge. The project costs PHP33.5 billion. Other project proposals that we are lining up to undergo feasibility studies include the Kaliwa and Kanan Dams, the Panay-Negros-Guimaras Bridge, the Sorsogon-Samar Bridge, the Leyte-Surigao Bridge, and a High-Speed Rail connecting Manila and Clark.

We are pursuing infrastructure development not just to decongest Metro Manila, but promote regional development through improved connectivity, achieve inclusive growth, and reduce inequalities among various places in the country. As you can see we are pursuing several airport and port projects around the country to accommodate this initiative. These include the Batangas Port, the development of the Cebu and Cagayan de Oro ports, the modernization of the Davao Port, the Tagum-Davao-GenSan High Standard Highway, the Zamboanga Port development project, the improvement of the General Santos City Port as well as several regional airports.

I cannot stress enough how infrastructure is an essential element in addressing development constraints in the country, and how it will spur this administration in accomplishing its 0+10-Point Socioeconomic Agenda. In Socioeconomic Agenda Number 3, infrastructure will prove essential in enhancing mobility and improving digital and physical connectivity. Under Socioeconomic Agenda 5, rural and value chain development may be enhanced through the acceleration of irrigation development and provision of basic infrastructure services such as electricity and water supply. Under Socioeconomic Agenda 7, infrastructure is needed in human capital development through provision of adequate secured learning and healthcare facilities. And lastly, under Socioeconomic Agenda 8, infrastructure will aid in developing the country’s capacity in research and development (R&D), enhancing innovation, creative capacity, and the application of nuclear science and technology.

As I end, I would like to thank the organizers, sponsors, and the participants for this event. Hopefully this event will create not only greater awareness about the infrastructure program of the government, but more importantly to mobilize support from various stakeholders. Events like this are instrumental in encouraging more investments to come our country’s way. This forum stands as a good venue for government to work with the private sector and development partners towards national progress and inclusive growth.

Thank you again for having me, and may we all have insightful discussions ahead.
Salamat at mabuhay.
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