MANILA, July 17 — The Duterte administration has adopted institutional reforms in streamlining infrastructure project management processes, as the country ramps up infrastructure spending deemed vital to sustaining economic growth.
“The way we approved projects is much faster than previous administrations and we have also streamlined the processes,” said National Economic and Development Authority (NEDA) Director General Ernesto Pernia after President Rodrigo Duterte marked his first year in office.
Pernia said the NEDA reduced the social discount rate from 15 to 10 percent, and increased the threshold for projects that will go through the Investment Coordination Committee (ICC) and NEDA Board from PhP1 billion to PhP2.5 billion.
The social discount rate refers to the interest rate used in cost-benefit analyses of public projects to determine whether they are acceptable.
The NEDA updated the economic hurdle rate due to improved Philippine economic conditions, which have lowered the cost of domestic and foreign capital.
“This will facilitate the economic justification for more projects (and therefore approval by government) that will help in spreading more public services to far-flung areas of the country, in support of reducing poverty everywhere, as committed by the President,” the NEDA noted.
It raised the ICC project cost floor to “declog the pipeline of projects for ICC approval and to promote greater decision flexibility and accountability of line departments in implementing their priority projects.”
These institutional reforms were adopted in line with government’s goal to ramp up infrastructure spending to PHP8.44 trillion over the next six years to usher in what was touted as the “golden age of infrastructure” in the Philippines.
This translated to increasing spending on public infrastructure from 5.32 percent of gross domestic product (GDP) this year to as high as 7.45 percent of GDP by 2022.
Pernia further said projects of national significance were no longer exposed to temporary restraining orders (TRO), except from the Supreme Court, “so lower courts will not be able to issue TROs.”
The NEDA Board approved for adoption 75 high-impact flagship infrastructure projects, 53 of which cost PHP1.58 trillion.
NEDA Board approved 18 of the 75 high-impact infrastructure project, including the PHP211.46-billion Philippine National Railways (PNR) North 2 Malolos-Clark Railway Project.
The NEDA Board, chaired by President Rodrigo R. Duterte has also lined up for its approval two railway projects worth PHP285 billion .
Last month, it adopted the National Transport Policy (NTP) that aimed to unify all transport-related projects in the country.
In particular, the policy would synchronize decisions and investments of all transport-related agencies and better coordinate such efforts between the national and local levels.
The NEDA chief pointed out that President Duterte’s administration’s overall strategy is to promote regional and rural development towards social inclusivity.
“To this end, this administration commits to make infrastructure development a national priority focusing on the lagging regions and agriculture. Improving and expanding our infrastructure should create jobs, vitalize the regions, and help reduce inequality and poverty,” he said.
The 2017-2022 Philippine Development Plan (PDP) focuses on regional development, infrastructure, agriculture development and culture, all strategies consistent with the administration’s zero to 10-point socioeconomic agenda.
The NEDA projected at least 6.4-percent economic growth for the second quarter, recording the same pace of growth as first quarter, due to the absence of election spending.
Pernia said higher government spending, robust exports and higher factory output likely boosted last quarter’s growth.
The government targeted the country’s GDP growing within the range of 6.5 to 7.5 percent in 2017.
The economy expanded 6.8 percent in 2016, making the Philippines the second fastest growing major Asian emerging economy after China.
Apart from streamlining infrastructure project processes, Pernia said the NEDA had been pushing for tariff on rice imports after the quantitative restriction (QR) expired last month.
“We need rice tariffication because the import QR allowed by WTO (World Trade Organization) already ended. This is to prevent uncertainty as to what the demands of WTO members will be following the lapse of the QR,” he said.
The Legislative-Executive Development Advisory Council Executive Committee (LEDAC-ExCom) pushed for passage into law possibly within the year of rice tariffication and 12 other legislative agenda. (PNA)
