Position paper

In more than three decades as a civil engineer at the Department of Public Works and
Highways, Jose Al Fruto has handled numerous complex, large-scale infrastructure
projects.

Not all have gone smoothly. Incomplete planning and design, insufficient funding,
limited technical know-how in project preparation, and lack of inter-agency coordination
are some of the factors that can slow big projects down.

As the Philippines ramps up infrastructure investment under President Rodrigo

Duterte’s ambitious “Build, Build, Build” program, government agencies are changing
the way they do business to make sure projects happen on time and on budget.

New ideas, technologies to support “Build, Build, Build”

The Asian Development Bank (ADB) is supporting this effort through a new $100 million
loan for the Infrastructure Preparation and Innovation Facility (IPIF). Infrastructure
projects worth about $3.8 billion will be prepared under the facility. It will help the
government expedite the cabinet’s review and approval process and shorten start-up
periods for priority infrastructure projects.

“The IPIF will set a good working business model on how we can
speed up infrastructure projects without compromising quality.”
Rolando Tungpalan
“There are many challenges in implementing a major infrastructure project. It will be a
big help if the masterplan, feasibility study, and detailed engineering design are carefully
carried out to realistically address the requirements of a particular project,” said Fruto,
the assistant regional director of Department of Public Works and Highways (DPWH)
Region VI.

“We are also looking forward to the transfer of technology to our local engineers.
Hopefully our engineers can adopt the best practices in all other projects of DPWH,” he
said.

Up to $180 billion in new investment by 2022

The funding is ADB’s first technical assistance loan for the Philippine government. It will
help DPWH and the Department of Transportation (DOTr) prepare flagship projects,
including complex road networks, long-span bridges, flood control and urban water
systems, and crucial public transport, port, airport, and railway investments.
These projects are part of the “Build, Build, Build” program involving $160 billion to $180
billion in infrastructure spending until 2022 to boost economic growth by improving
access to markets and business opportunities across the country.

The IPIF will support only a small slice of the country’s huge infrastructure investment
needs. But the facility will allow the government to accelerate project implementation
and bring in international expertise and innovative practices in undertaking
sophisticated, large-scale projects.

Faster projects without compromising quality

“The IPIF will set a good working business model on how we can speed up
infrastructure projects without compromising quality,” said Rolando Tungpalan,
Undersecretary for Investment Programming at the National Economic and
Development Authority. “It will also set the stage for reforming our processes, our rules,
and at the same time build capacity that hopefully will permeate to the larger
bureaucracy.”

The timely mobilization of high-quality consulting services is critical to reducing project

approval and start-up times. Consultants will be selected using ADB’s rigorous
international competitive bidding process and will work hand in hand with implementing
agencies to prepare projects. This close collaboration will bring expert advice and
international best practice to government agencies, and introduce innovation in project
implementation.

Under the facility, project management units responsible for day-to-day management of
project outputs will be created at the DPWH and DOTr. The units will be headed by
department undersecretaries and will lead project preparation, monitor project
implementation, conduct quality assurance checks, and review consultants’ outputs.

ADB committed to raising project preparation capacity

The government has identified an initial list of priority projects to be supported under the
facility. An ongoing $5 million technical assistance grant is helping the government
recruit experts for these projects and strengthen project management and monitoring
systems in implementing agencies.

“The seriousness and dedication with which the government has taken this BBB
program is really commendable,” said Richard Bolt, ADB Country Director for the
Philippines. “ADB is committed to boosting the Philippines’ capacity in preparing these
projects and managing the risks to help ensure Filipinos across the archipelago benefit
from the country’s strong growth.”

The IPIF builds on ADB’s experience in supporting the government’s effort to

restructure the Public-Private Partnership (PPP) Center for the Philippines in 2011. The
bank also helped the government set up a project development and monitoring facility,
which provided assistance in identifying, developing, and financing bankable PPP
projects.

Based on ADB’s estimates, projects to be developed under the IPIF will add as much as
$10 billion to the country’s gross domestic product between 2019 and 2024.

“Proper infrastructure allows people access to work, markets, education, health care,
housing, and other services that will lift their standards of living. It also boosts business
potential and economic opportunities especially in rapidly growing areas. This project
will help the Philippines realize its potential and remain competitive,” said James
Leather, ADB Principal Transport Specialist.

NAYSAYERS are creating a ruckus saying President Rodrigo Duterte's P8.4-trillion

Dutertenomics of "Build, build, build" will shackle the country in debt for generations to
come. The longest contention comes from the opinion article of one Anders Corr, principal
at risk analysis company named after him, the Corr Analytics, in Forbes Magazine,
contending that the $167-billion debt that he claims will be lent by Beijing to fund the
Dutertenomics will grow to $452-billion on a 10 percent interest rate. He even paints a
worst-case scenario of China imposing a high interest rates on the new debt that can bring
"Philippines’ debt to GDP ratio to 197 percent, second-to-worst in the world.” Duterte's
economic managers, however, say that the concept of taking the build-build-build program
funds all from China does not have any basis. In a briefing in Beijing, Trade Secretary
Ramon Lopez said 80 percent of the infrastructure fund will be locally generated and 20
percent will come from external creditors, thus the importance of passing the proposed
comprehensive tax reform program. Naysayers are saying this is impossible. We can
understand why. It's in the Filipino psyche. Filipino psyche says if you need to build
anything, you take out a loan. That's just how we have been preconditioned to do. Filipino
psyche says the national government is always cash-strapped. That is just how we were
conditioned to think. But, looking back through the convoluted recent history of corruption
scandals, we can better understand why Filipinos were made to think poor. It is so that
money can be stolen everywhere, and still the Filipinos will not think anything wrong with a
cash-strapped government. Remember just one private individual: Janet Napoles.
Apparently, Napoles has mastered the ropes of government corruption she is even being
accused of masterminding the Priority Development Assistance Fund (PDAF) scam. How a
private individual can mastermind a government scam is a myth we are being made to
swallow, just like us being poor. Napoles is wily, yes. Her fingers were already dipped in
corruption since the early 1990s, from a shipyard myth in Cebu where she ran away with
millions of investments from gullible investors, to the substandard kevlar helmets purchased
by the Armed Forces of the Philippines in 2001, to tax evasion between 2009-2011, to the
Malampaya royalties worth P900-million, to the fertilizer scam, and then the PDAF scam.
The amount scammed by private individual Napoles can be as big as P10-billion, we are
made to believe. Common sense will say that for P10-billion government money to be
released to one private individual, there must be a much higher amount sucked out by those
in authority. Corruption alone has been sucking our government coffers dry. How often were
we made to beg for help when disasters strike. It was all the government did in the past
administration: beg. On the first year since the Duterte Administration took over,
government has not begged for help yet, and yet it is operating on a budget created by the
past administration yet. In that tiny window into how government runs and is being sucked
dry, we already get a glimpse of how huge the budget is that falls into the hands of the
corrupt. There we can better understand why an old retired non-government worker turned
Cabinet Secretary, Judy Taguiwalo, tasked to head the Department of Social Works and
Development, is one of the least liked Cabinet Secretaries of the Duterte Administration by
politicians. We can better comprehend why until now, Taguiwalo cannot be confirmed and
looks like the traditional politicians manning the Commission on Appointments (CA) will be
slamming the doors on her. Taguiwalo, after all, may be among the poorest Cabinet
members, but she guards a goldmine. In the meantime, we still nurture the belief that we
are poor when all this time it was the corrupt who made us believe this so that they can run
away with the billions without us knowing any better. But we are so much wise now.

THE Philippines is fast urbanizing. It's one of the fastest urbanizing countries in East Asia,
the World Bank said, thus, the present administration has the important task of deciding and
dong that would most benefit the people through economic growth, job creation, and
poverty reduction, a new WB study entitled "Philippines Urbanization Review: Fostering
Competitive, Sustainable and Inclusive Cities" said. "While urbanization in the Philippines
has had positive impacts on increased productivity, economic growth and poverty reduction,
the country has not benefited from urbanization gains as much as other countries which
leaves much scope for increasing opportunities going forward," the report's executive
summary reads. The report underlined four structural issues that continue to trip the country
in benefiting from urbanization. First is its archipelagic geography that creates divisions in
connectivity to both internal and external markets. Second is that the country went from
agriculture to service sector dominance, bypassing the industrialization process. Third is the
stagnation of the manufacturing sector, and fourth, its high exposure to natural hazards.
"Beyond these key structural issues are two binding constraints which, unlike the structural
issues, can be addressed through a bold reform agenda. These include highly fragmented
institutional arrangements for urban development and metropolitan governance, and major
shortcomings in land administration and management. The resulting impacts of these
issues coupled with rapid urbanization have greatly hampered city competitiveness affecting
economic development, job creation, poverty reduction and livability," the report added. It
stressed the importance of inclusive growth, where everyone benefits -- the wage earner to
the business owners. Among its recommendations is managing urbanization for efficiency
and growth where policies on land use and investments should focus on managing the
existing urban density and prepare for greater congestion. Infrastructure development
should be embarked on without land use planning and an integrated urban strategy.
Building as investors come and want is not longer an option as leaders have to have a
vision beyond just the present. "Investments should be focused on increasing the capacity
of existing road networks on one hand, and expanding and modernizing the mass transit
system on the other hand," it said as improving transport infrastructure not only enhances
productivity but also lowers transport cost and enhances market access. Of major concern
as well are the urban poor and how they have to be included in all development advances,
from education that allows the young to become productive members of the society to
housing and support for community enterprises. We do not need to look for to witness this
fast urbanization, it is right outside our homes, on the congested streets that now meet our
every mornings. We have to act now, build and enhance policies now with a forward vision
of even up to 50 years of a century. We cannot afford to bungle this one today, because
whatever we do now will have far-reaching implications in our future.

The Duterte administration gets plenty of attention—positive and otherwise—for its

aggressive war on drugs.
But lesser known is an aggressive plan to combat poor infrastructure that has hobbled
economic growth for years.
Many of the current administration’s projects revealed so far are actually carryovers
from previous administrations. This article, nevertheless, outlines a number of the
projects the current administration said it would pursue.
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Overall, P8 trillion in infrastructure spending was pledged through Duterte’s six-year

term. The aim is to bring infrastructure spending up to 7 percent of the country’s
economic output, from the current 5 percent.
More details here were shared under the economic team’s “build, build, build” banner
that was unveiled in late 2016.
Most of the projects fall under the Department of Transportation and Department of
Public Works and Highways.
In a relatively smaller scope outside transportation, there were also projects to address
flooding, water supply, school infrastructure, healthcare, prison quality and power.
The biggest items involve the railway sector, the lion’s share of which will be built in
Luzon.
The DOTr earlier said there were more than a dozen train projects worth over P1
trillion.
This included modernizing, upgrading and increasing the capacity of the Metro Rail
Transit Line 3 and extending the Light Rail Transit Line 1 to Cavite, being undertaken
by a consortium led by Metro Pacific Investments Corp. and Ayala Corp.
New projects lined up for Luzon were the LRT Line 4, a 19-km line from Taytay
Rizal to Ortigas Avenue; LRT Line 6, a 19-km train from Niyog, Cavite to
Dasmariñas, Cavite; the 35-km PNR North Commuter line from Tutuban to Malolos,
Bulacan and another 55-km PNR North extension from Malolos to Clark, Pampanga.
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PNR South Line running 72-km from Tutuban to Los Baños, Laguna and LRT-2 East
and West extension lines are also on the list.
The DOTr cited “Line 5a,” a railway “spur line” to the Makati central business district
which would use an existing tunnel. In Cebu, there would be a 25-km rail project
costing P98 billion; a 25-km Central Philippine Rail worth P86 billion, and a 2,000-
km Mindanao Rail project.
There’s also a proposed Manila-Clark (Pampanga) railway, which will “guarantee”
one hour travel time from the capital district to Clark Airport.
Already under construction is the P71-billion MRT-7 line that will link Metro Manila
(Quezon City) to Bulacan. This would be finished by 2020 and will be operated by
San Miguel Corp.

The DOTr said most of the projects would be done or partially opened during the term
of President Duterte.
There was also a proposed 14-kilometer subway line linking business districts in
Metro Manila. But this would be finished beyond 2022, when Mr. Duterte’s term
ends, the DOTr said.
The DPWH and Bases Conversion and Development Authority also outlined some
road projects.
These included the Santa Monica-Lawton-Bonifacio Global City link bridge (to
decongest Edsa by 100,000 vehicles), the University of the Philippines-Miriam
College-Ateneo De Manila Viaduct, the Iloilo-Guimaras-Negros-Cebu Link Bridge
and the Davao City Bypass Construction Project.
The Duterte team would also see the completion of two Metro Manila tollroads
linking North Luzon Expressway and South Luzon Expressway during its term.
These are the Metro Manila Skyway Stage 3 of SMC, which was started in 2014 and
would be finished by 2017 or 2018, and Metro Pacific’s connector road, which would
be finished by 2020.
Metro Pacific is also starting the Cavite Laguna Expressway this year, with
completion seen by the end of 2019.
The government, meanwhile, said it would pursue a Bus Rapid Transit project.
In September 2016, the board of the National Economic and Development Authority
approved the P38-billion Metro Manila BRT project.
This is a 48.6-km system covering Monumento to Diosdado Macapagal Ave./Roxas
Boulevard, with integrated routes between the Ortigas Business District, Bonifacio
Global City, and Makati Business District.
The BRT has defining features, the core of which is a dedicated bus lane, with
specialized buses and stations. Buses, for example, would have the same height as
station platforms, speeding up the boarding and unloading process.
The BRT, which would occupy Edsa’s center lanes, would replace buses in the yellow
lanes on the rightmost lanes of the major thoroughfare.
The DOTr said the plan was expected to cut road congestion significantly, and in a
more cost-efficient manner, as the BRT has done in dozens of other cities around the
world. (A BRT project in Cebu is due for completion in 2019).
The DOTr also listed a cable car system project. Potential locations would be along
Pasig River, Boracay and Baguio.
New infrastructure projects in the air sector are focused on modernizing and
expanding existing gateways. This included the P75-billion Ninoy Aquino
International Airport Public Private Partnership Project.
Approved by the Neda board in September, this PPP has yet to be officially rolled out
to participants, despite the high-level of interest from big conglomerates.
There is also the P108-billion PPP deal to modernize, develop and operate the
Bacolod-Silay, Iloilo, Davao, Laguindingan, and New Bohol air gateways.
The current administration, in a surprise move, decided to bid out the airports
individually instead of in packages comprising several airports—delaying the process
further.
The DOTr also wants to modernize Clark International Airport, while relocating
general aviation services to either Clark or Sangley Point in Cavite. This would help
decongest Naia, which is now operating well beyond its intended capacity.
On the maritime sector, the Philippine Ports Authority will scrap the P19-billion
Davao Sasa modernization project. Instead, it will pursue a down-scaled version
worth about P4.9 billion.
The administration is likewise planning to revive the Pasig River Ferry Service and
the broader roll-on, roll-off service for inter-island travel around the country.
A number of projects under the PPP framework are slated for deployment.
As of Dec. 15, 2016, the PPP Center has outlined 38 projects in its pipeline, valued at
P5.6 trillion. (The amount was mainly on account of the reclamation component of the
Manila Bay Integrated Flood Control and Expressway, which is still under study).
Thus far, none of the PPPs under procurement that were left hanging by the Aquino
administration have progressed during the Duterte administration.
As noted, delays or cancellations hit the regional airports PPP and Davao Sasa.
Bidders are also waiting for developments on the LRT-2 operations and maintenance,
LRT-6, Road Transport Information Technology Project (Phase 2), New Centennial
Water Source-Kaliwa, and Regional Prison Facilities (a new penitentiary in Fort
Magsaysay, Nueva Ecija).
A number of PPP projects remain under study. These included the NLEx East
Expressway project, Manila East Rail System, the Sucat Gas Power Plant and the
rehabilitation of the National Center for Mental Health.
In a departure from the Aquino administration’s position, the President said his
administration was willing to consider unsolicited proposals from the private sector.
The country’s largest business groups are expected to come forward with new
proposals, and many have already done so in recent months.
The groups of businessman Wilson Tieng and taipan Henry Sy Sr. are proposing to
reclaim 2,500 hectares of land in offshore Sangley. The P1.3 trillion project would
then serve as the site for a new international airport, seaport and industrial zone.
Separately, SMC is proposing a 2,000-hectare international airport project in Bulacan.
Ayala Corp.’s infrastructure arm announced last year that it was eyeing unsolicited
infrastructure deals for Metro Manila.