JOJO G. MONTAÑER JR.

PA 203 – Principles of Public Administration

Build, Build, Build Project

Introduction

The level of government spending on infrastructure has indeed been wanting in

previous administrations. Duterte’s two immediate predecessors, Gloria Macapagal Arroyo

and Benigno Aquino III, oversaw a decade of sustained macroeconomic reform, anchored by

fiscal tightening, moderate inflation, expanding trade surplus and steady economic growth.

Yet, the cost of their disciplinary economic policies was lack of sufficient investment in basic

infrastructure. Under the Aquino administration, in particular, under-spending was a major

concern. Both the Arroyo and Aquino administrations were also overly dependent on private-

public-partnership (PPP) schemes with local conglomerates, which lacked proper

competencies. Before Rodrigo Duterte assumed the presidency of the country, infrastructure

expenditures in the Philippines had largely been below 5% in relation to the country’s gross

domestic product (GDP), as seen in Table 1. In 2008, in its Policy Brief, the Senate Economic

Planning Office cited the recommendation of the World Bank for the Philippines to invest at

least 3 to 5percent of GDP in infrastructure. Despite this, the trend for infrastructure under

spending continued.

The purpose of this research is to compare the previous administration of Arroyo

versus Aquino versus Duterte’s Infrastructure policies and determine which of the three

presidents of the Philippines has the most Infrastructure growth during and after their term, Is

Duterte’s “Build, Build, Build” Program better than the previous administration’s

infrastructure policy? How does its quality be compared to other foreign countries, and what

will be the outcome of the future.

Mechanics/Methodology

In this research, the researcher used Deductive reasoning to determine the conclusion

of the research through collected data from previous administration infrastructure policies,

determining the GDP of their administration during the year, and compared its GDP by

determining when the economic growth went up or down. The researcher also determines the

potentiality of the current president’s “Build, Build, Build” (BBB) Program to the economy

of our country and looking ahead the promises and risks in achieving it.

Content

TABLE 1: Average infrastructure spending (% of GDP), by administration

ADMINISTRATION Years administered Infra Spending (% of total

GDP)

MARCOS 1965 -1986 3.2

AQUINO 1986-1992 2.2

ESTRADA 1992-1998 2.2

RAMOS 1998-2001 2.2

ARROYO 2001-2010 1.9

AQUINO 2010-2016 2.9

Source: Philippine Institute of Development Studies (2017, as cited in Philippine

Infrastructure Transparency Portal, n.d.)

On a per-year basis, Table 2 presents government spending on infrastructure, for the years

2011 to 2016.
Table 2: Government infrastructure spending (% of GDP), 2011-2016

Year Gap Actual Target

2011 0.0 1.81 1.60

2012 0.14 2.06 2.20

2013 0.0 2.66 2.50

2014 0.76 2.74 3.50

2015 0.0 4.33 4.00

2016 0.0 5.12 5.10

Sources: National Economic and Development Authority (2017); Department of Budget and Management

(2016)

Based on the country’s rankings in the World Economic Forum’s Global

Competitiveness Index, the Philippines lags behind its ASEAN neighbours in terms of

infrastructure quality, Therefore, it is not only the quantity of infrastructure in the Philippines

that is disappointing, but equally frustrating is the quality of infrastructure.

The Philippines has the distinction of being the lowest among ASEAN countries in the report

in terms of the quality of overall infrastructure, ranking 113 out of 137 for 2017-2018. Even

worse is the fall in the rankings from being ranked 98 out of 133 in 2009-2010.
 Interestingly, while data from the Senate Economic Planning Office (2006) and from

Navarro and Llanto (2014) reveal that transportation has accounted for more than half of the

Infrastructure spending at 52 % for the years 2006 to 2010 and at 58% for the period 2011 to

2016, the country still lags in this category compared to the other ASEAN countries.

Conclusively, public infrastructure in the Philippine has been inadequate.

Ports and roads have been persistently congested while the MRT and LRT facilities in the

National Capital Region have become increasingly overcrowded and interrupted as a result of

mechanical breakdowns. The result is increased travel time and detrimental effects on both

the economy as well as the credibility of the government (Department of Budget and

Management, 2016a). In fact, the Japan International Cooperation Agency (JICA) and the

National Economic and Development Authority (NEDA) claimed that the cost of traffic

congestion—including fuel costs, vehicle operating costs, among others—amounted to more

than P2.4 billion every day in Metro Manila alone in 2014 (Bino and Dacanay, 2018).

In terms of interconnectivity, the condition of the Philippines as an archipelago with three

main regions comprised of more than 7,000 islands poses a challenge (Board of Investments,

2018; Navarro and Llanto, 2014).

When good transportation facilities are in place, it would be easier and more

convenient for producers to interact with consumers of products and ideas, as well as to

promote tourism.

The Department of Budget and Management (2016a) identified the six main

challenges in infrastructure spending:

(1) Lack of planning that would influence the absorptive capacities of the agencies

involved as well as the private sector;

(2) Right-of-way and just compensation issues;

 (3) Impediments that involve electric power lines and posts, telecommunication lines,

natural gas pipelines, as well as water distribution lines;

(4) Existence of informal settlers along with the needed investment meant for their

relocation, housing, and livelihood;

(5) Troubles in advancing social acceptance of some initiatives, including coal-fired

plants, enormous multi-purpose dams, and sanitary landfills; and

(6) Slow process in obtaining permits from government agencies.

The “Build, Build, Build” program

The BBB program was not one of the campaign promises of Duterte. By his own

admission, this was an after-thought, when he was definite of winning the presidency. He

aims to create a “Golden age” in infrastructure development through this ambitious

P8-trillion Infrastructure.

Table 4 shows the big-ticket/flagship projects under the “Build, Build, Build” program.

Project Title Project Description Target Start and

End of

Implementation

Asbang Small The project involves construction of reservoir 2019-2023

Reservoir Irrigation dam and irrigation facilities in Matanao, Davao

Project del Sur.

Bohol - Leyte Link Construction of 1.0-km Bohol-Lapinig Island 2021-2027

Bridge (included in bridge and 18.0- km Lapinig Island-Leyte

the Nationwide Island bridge for inter-regional connectivity and to

Provinces Link enhance mobility and transport of goods and

Bridges) people between Bohol and Leyte.

Cebu - Bohol Link Construction of a 24.5-km bridge that will link 2021-2030

Bridge (Nationwide Cebu and Bohol. Project objective is Regional

Island Link Bridges) Connectivity and mobility enhancement and

transport of goods and people between Bohol

and Cebu.

Cebu - Negros Link Construction of a 5.5-km bridge which aims to 2021-2030

Bridge (Nationwide enhance mobility and flow of goods and

Island Provinces Link services; prioritize and Operationalize new

Bridges) direct links to the Island of Negros and Cebu; to

support the increasing growth of tourism and

agro-industry and further integrate regional

economy.

Circumferential Road Construction of a 6-lane road with a total length 2021-2024

3 (C3) Missing Link of 5.7-km (considering the Alignment

Project Alternative 4) from N. Domingo St in San Juan

to Ayala/Buendia, traversing Pasig and San

Juan Rivers along the riverbanks

Leyte - Surigao Link Construction of a 20-km bridge to connect the 2019-TBD

Bridge (Nationwide Leyte-Mindanao Island via Underwater Tunnel

Island Link Bridges) Bridge or a Long-Span Overhead Bridge

Luzon - Samar Link Construction of an 18.2-km bridge to connect 2021-2027

Bridge (Nationwide the Samar to the main island of Luzon (Allen-

Island Provinces Link Matnog). The project consists of 4 bridges with

Bridges) the following lengths and locations: 1.2-km

Sorsogon-Calintaan Island Bridge, 7.0-km

Calintaan Island-Capul Bridge, 6.0-km Capul-

Dalupirit Island bridge, and 4.0-km Dalupirit-

Samar Bridge.

Gregorio del Pilar Construction of an 89 meter center clay core 2019-2023

Impounding Project rockfill dam, spillway, 12km transbasin tunnel,

power plant with installed capacity of 180MW,

and irrigation and drainage facilities.

North Luzon Construction of a 91.20-km, 4-lane expressway 2018-2021

Expressway East, which consists of Phase I and Phase II, and will

Phase I and II form an important transport access in the

eastern area of Region III. NLEX East starts

from the end point of La-Mesa Parkway and/or

junction of C-6 in San Jose del Monte via

Norzagaray, Angat, San Ildefonso, San Miguel,

Gapan, and Sta. Rosa in parallel with the Pan

Philippine Highway up to Cabanatuan.

Mindoro - Batangas The proposed project involves the construction 2020-2023

Super Bridge of a 15 kilometer Super Bridge, two (2) or four

(4) lanes with an optional pedestrian/bicycle

lane, which will link Mindoro Island to the

Province of Batangas. The bridge will cover the

8.5 km from Mindoro Island to Verde Island

and 6.5 km from Verde Island to Batangas, over

a 10m – 300m water depth.

Bohol Northeast Basin Envisioned Project components include: two (2) 2019-2023

Multipurpose Project Multipurpose Storage Dams, Five (5) diversion

dams, Transbasin Tunnel, Hydroelectric

Powerplant, and Irrigation and Drainage

Facilities.

Camarines - Construction of a 10.7-km, 2-lane Tourism 2020-2023

Catanduanes Friendship Bridge with Tourism Complex

Friendship Bridge Midway, connecting San Andres, Catanduanes

(Nationwide Island to Caramoan Peninsula, Camarines Sur

Provinces Link

Bridges)

Dalton Pass East Construction of a 60-km bypass road consisting 2021-2026

Alignment Alternative of roads, bridges, and tunnel that connects the

Road Project (East provinces of Nueva Ecija in Region III and

Dalton Bypass Nueva Vizcaya in Region II.

Project)

Davao City Construction of 23.3 km expressway within 2021-2026

Expressway Project Davao City proper connecting the Sta. Ana Port

near the outskirts of the City proper in Panacan

Road and Carlos P. Garcia National Highway

Ilocos Norte Irrigation Construction of a 126.41 meter-high storage TBD-2023

Project, Stage 2 dam across the Palsiguan River in the

municipality of Lagayan, province of Abra.

Ipo Dam No. 3 Construction of a dam downstream of the Ipo 2020-TBD

Dam and upstream of the Bustos Dam primarily

to serve as catchment for spillage from Angat

Dam and mitigate flooding within the area.

Mindanao Railway The project will extend the MRP line to Butuan TBD

Project (Phase 2) by a length of 206.20. The whole alignment or

the Butuan-Nabunturan-Davao Corridor

extended to Digos will have a total of 308.48

kms. Extending the rail line will not only

expand the ridership but also the average travel

distance of passengers resulting into operating

profitability.

Mindanao Railway Construction of a 521.52-km railway 2020-TBD

Project (Phase 3) completing the loop of the MRP system, i.e.,

MRP-1.

Panay-Guimaras- Construction of roads, interchanges, and sea- 2021-2026

Negros (PGN) Island crossing bridges that will link panay Island to

Bridge Project Guimaras Island (Bridge A) and Guimaras

Island to Negros Island (Bridge B). with a total

length of 30.50 km

Rehabilitation of all Rehabilitation and uprating of Agus I, Agus II, 2020-2022

Agus-Pulangi Agus IV, Agus V, Agus VI (except units 1 and

Hydroelectric Plant 2), Agus VII and Pulangi IV Hydroelectric

Units power plants.

 By the end of his term in 2022, President Duterte hopes to reach the 7.3% mark in

infrastructure spending as percentage of GDP (Lamentillo, 2018). This infrastructure program

is intended to boost business and economic activities in the countryside, thereby helping to

raise millions of Filipinos out of widespread poverty (Fenol & Fuentes, 2018).

Specifically, the objectives of the BBB program include creating (1) more railways,

urban mass transport, airports, and seaports; (2) more bridges and roads; and new and better

cities (Philippine Infrastructure Transparency Portal, n.d.) under the supervision of the

National Economic and Development Authority (NEDA), the Department of Public Works

and Highways (DPWH), the Department of Transportation (DOTr), and the Bases

Conversion and Development Authority (BCDA).

Conclusions and Recommendations

Economists, in general, support the prescription that infrastructure spending leads to

economic progress. Magnier (2015) mentioned that there is little doubt about the large and

sustained economic benefits that spending on physical infrastructure can bring, provided they

are “focused, cost-effective and either relieve bottlenecks or exploit vast new markets.”

Andrew Warner, an economist at the International Monetary Fund, as cited in Magnier

(2015), however, believes that the benefits are not automatic, saying “when you flip the

Infrastructure switch, the light doesn’t necessarily turn on.” In his study, Warner (2014) did

not find strong evidence supporting the proposition that infrastructure projects spark

economic booms, even using the case of the Philippines during the Marcos years as a case

where there was low growth despite high infrastructure spending.

Magnier (2015) also mentioned that some economists are also questioning “whether the
link is so clear, given that “in the real world, where bloat, corruption and politics—not

economics—more often shape public policy, the long-term dividends of infrastructure

spending are often muddled.

And, that is where the Achilles heel of the Philippines lays—corruption and politics.

The national budget for 2019 was delayed because of what can only be presumed as political

horse trading among the legislators, based on historical experience, regarding allocations for

infrastructure projects. Members of the appropriations committee traded accusations with the

budget secretary, with the leadership of the House of Representatives, and even among

themselves about illicit budgetary transactions, thus, prolonging the budget process.

Of course, there is still that lingering public perception about the magnitude of graft and

Corruption in infrastructure projects, where commissions, kickbacks and bribes happen at

every level of the bureaucracy, causing the project costs to be outrageously overpriced, or the

quality of the project to be greatly compromised, or both.

Current economic conditions and requirements may support an aggressive

infrastructure spending in the Philippines, if only to recover from previous years’ under

spending. But, rather than just spending more on infrastructure, the government should have

also paid very close attention that the projects are well chosen and are addressing real and

urgent needs. Risk-benefit analyses that are vetted by independent experts from civil society

organizations should have accompanied the process.

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