With an array of flagship infrastructure projects due for rollout this year, Finance Secretary Carlos Dominguez III has expressed confidence that these projects under the Duterte administration’s ambitious “Build, Build, “Build” program will be implemented fast enough and free from graft and corruption.
The Duterte administration has identified 75 flagship infrastructure projects under its five-year “Build, Build, Build” program, of which 23 have been given the go-signal by the National Economic and Development Authority (NEDA) Board chaired by President Duterte and are already “shovel-ready,” Dominguez said.
“Under the leadership of President Duterte, we have managed to reduce corruption to the barest minimum in all our government efforts. We have started the projects already,” Dominguez said in an interview in Singapore on the sidelines of the ASEAN Finance Ministers’ and Central Governors’ Meeting held last April 5-6.
“So the projects are going quickly, and we are very, very confident that they are going to be completed on time with no corruption,” he added.
With a combined total cost of $170 billion, the implementation of these big-ticket infrastructure projects “is the heart of the economic program” of the Duterte administration, Dominguez said.
“This investment is very much needed by our country. We have to modernize our infrastructure and, at the same time, provide a lot of good jobs and a lot of business opportunities for our people,” Dominguez said.
In his speech last April 5 at the 8th World-Bank Singapore Infrastructure Finance Summit, Dominguez said the Duterte administration has tweaked the traditional Public-Private Partnership Program (PPP) into a “hybrid” model so that the government now implements the projects using a combination of its own budget, the massive inflows of Official Development Assistance (ODA) and funds raised from bond floats at investment-grade rates to speed up project execution, reduce completion risks and deliver the economic benefits to the people as soon as possible.
Dominguez also underscored in his speech the need to include a fourth component in the PPP—a “last P,” which he said means “People,” to ensure that they benefit the most from the projects implemented through this mode.
As examples of the government’s resolve to swiftly implement its big-ticket projects, Dominguez cited the P9.3 billion expansion of the passenger terminal of the Clark International Airport in Pampanga, which already broke ground, and the signing of the P51.3 billion loan agreement with Japan for the first tranche of Tokyo’s financing assistance to build the first phase of the Philippines’ first-ever Metro Manila subway.
Earlier, Finance Undersecretary Grace Karen Singson said in a Manila forum that the Duterte administration had abandoned the traditional PPP mode because the government consumed too much time renegotiating contracts, deciding on cost recovery issues and resolving legal disputes among contesting private bidders, among other reasons.
Another factor—cost—has also dissuaded the government from implementing projects through the usual PPP, which often leads to excessive user fees charged to the public to ensure that the private sector partners recoup their respective investments quickly and at wider profit margins, Singson said.
Moreover, the government usually imposes front-end charges to meet its own needs, further driving up expenses for PPP projects, she said.
With the government adopting a fresh approach to financing projects, Singson said that on the Duterte watch, it only took seven months from the approval by the NEDA and the Investment Coordination Committee (ICC) to start construction on the expansion of the Clark International Airport. Its Operations and Maintenance component, a PPP project, is also underway, she noted.
Singson stressed, however, that PPPs have not been ruled out by the Department of Finance (DOF), which continues to recognize the potential values of such partnerships, especially in terms of innovations and efficiency offered by the private sector that will result in better value for money and quality infrastructure.
She said unsolicited proposals from the private sector that require no direct government guarantees and include new technologies or concepts are also welcome.
To ensure that the flagship projects meet global standards, Singson said the government’s economic team has put in place two facilities to efficiently prepare and monitor these projects.
Singson said one of them is the $160-million Infrastructure Preparation and Innovation Facility (IPIF), which would provide infrastructure implementing agencies such as the Departments of Transportation (DOTr) and Public Works and Highways (DPWH) the services of both national and international experts in project preparation and implementation.
This funding facility was set up in partnership with the Asian Development Bank (ADB).
Meanwhile, the DPWH, Department of Budget and Management, National Economic and Development Authority (NEDA), DOF, DOTr, and the Office of the Cabinet Secretary, meanwhile, comprise the Project Facilitation, Monitoring, and Innovation Task Force to monitor the progress of the “Build, Build, Build” program and take action against bottlenecks and other delays to ensure projects are delivered on time, Singson said.
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