Bernardo M. Villegas
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Building Bigger Better Bolder Before (Part 3)

 In the Philippine Infrastructure Summit held last November 23, 2023, Undersecretary Cathy Fong of the Department of Finance highlighted also the improvements in the new PPP Code.  She cited the integrated, simpler, and streamlined processing that will make the approval time shorter and that ensured sustainability of projects since the new Code protects the proponents from any substantial changes in policies and legal requirements that may result from changes in the Administration.  From feedback that we got from the series of roadshows we conducted in Madrid and Barcelona in April and November of this year, one of the major complaints of investors who have had experiences in doing business in the Philippines was precisely the unsettling changes in policies and legal requirements affecting FDIs with every new Administration over the last twenty years or so.

These uncertainties faced by potential foreign investors especially hounded the railway sector in which there were constant changes in policies from one Administration to another.  No wonder, as Senator JV Senator said in his Keynote Speech, in the latest available Global Competitiveness Report, we ranked 102nd out of 141 countries, with the score of 41.5 out of 100 in terms of our Transport Infrastructure.  Among the Asian counties, the Philippines received the lowest rated railway service with the score of 2.5, ranking 86th out of 101 countries globally.  Meanwhile, on the ground, this results to long lines in terminals and congested roads. As we have experienced during these months of the Christmas season of 2023, the Filipino commuters have suffered untold troubles in traffic jams, congested terminals and other inconveniences in their travel as a result of an inefficient transport system.

Senator Estrada referred to a most relevant quote that gives light to the woes of Filipino commuters.  He cited Gustavo  Petro, President-elect of the Republic of Colombia:  “A developed country is not a place where the poor have cars.  It’s where the rich use public transportation.”  Those who have visited the richest country in Southeast Asia, Singapore, know exactly what this means. In his presentation, the Senator gave the assurance that the present Administration has a very well-defined mass transport long-term plan.  He presented a slide in his Power Point Presentation that showed a growth triangle that will be the basis of a railway transport plan for the most populous island of the Philippines, Luzon.  In this vision of a growth triangle, an entire mass railway transport system will emanate from a triangle connecting the Bataan-Subic Freeport in Central Luzon to Tutuban in the National Capital Region and forming a triangle to the Batangas Port in Calabarzon.  This is in line with a study undertaken by the Center for Research and Communication (CRC) in partnership with U.S.A.I.D. more than ten years ago identifying the Batangas Port as replacing the Manila Port as the gateway from Luzon to the rest of the Philippines and the rest of the world.  The equivalent port in the Visayas is Iloilo and in Mindanao Cagayan de Oro which has an advantage over Davao because of its greater geographical accessibility to sea transport.

The Philippines has a long way to go to be able to match the railway systems of Indonesia and Vietnam that have already functioning bullet trains for rapid mass transit.  It would be ideal, as shown in the PPP of Senator Estrada, if part of the rail system going from La Union province the north to Sorsogon in the South could already incorporate some bullet trains that can be constructed by some of the prospective investors from Spain, Japan and South Korea who have much experiences in constructing rapid transit systems.  Similar railway systems are being programmed for the island of Panay and the second largest island in the Archipelago, Mindanao.  It is a pity that for political reasons, the active participation of China in building a modern railway system in Mindanao has been cancelled.  The Better Mass Transport Plan prepared by the Government has already envisioned the Mindanao Rail system connecting Zamboanga City in Western Mindanao to Tagum City, Davao City and Digos City in Eastern Mindanao.

It is unfortunate that loan negotiations with China for the Mindanao Railway (MRP) have stopped for political reasons.  The MRP  is vital to make this second largest island, very well endowed with agricultural resources, to be the main food basket for both the domestic and foreign markets.  There is hope, however, that Japan can replace China as the main funding source for the MRP as recently announced by House Assistant Minority Leader Johnny Pimentel who represents the second congressional district of Surigao del Sur and a member of the House committee on flagship programs and projects.   There is already a precedent:  the Japan International Cooperation Agency (JICA) is already providing the Philippine Government low-interest ODA to fund the Metro Manila Subway.  Phase 1 of the MRP is  projected to cost P83 billion and would involve the construction of a 102-kilometer train line linking Tagum City, the provincial  capital of Davao del Norte, with Digos City, the provincial capital of Davao del Sur, through Davao City.  Japanese consumers would be benefited by more efficient transport in these regions because they are the sources of significant agricultural exports to Japan of bananas and pineapple products.

An integral part of the Mass Railway Transit Plan is to convert major railway stations into Economic Hubs that would include the components of a self-contained urban center such as areas for Housing, Business District, Commercial Area, Industrial Estate and Agri Terminal.

It cannot be repeated too often that manufacturing is not the only route to the full industrialization of a country.  Industry also encompasses infrastructures, construction, public utilities and mining.  Even if we continue to lag behind our East Asian neighbors in the manufacturing sector, we can still be a highly industrialized nation if we fully implement the Master Plan Priorities presented by Senator Estrada in his Keynote Address.  These priorities have been clearly outlined by the BBM Administration:  Transport and Logistics Infrastructure Program; Energy Infrastructure Program; Water Resources Infrastructure Program; Information and Communications Technology (ICT) Infrastructure Program; Social lnfrastructure Program; Agri-Fisheries Modernization and Food Logistics Infrastructure Program; and Asset Preservation and Maintenance Strategies.

The view from the Department of Public Works and Highways was presented by Undersecretary Maria Catalina E. Cabral, Undersecretary for Planning and PPP Service.  From her, we get a more micro view of the Strategic Infrastructure Programs aligned with the Philippine Development Plan 2023 to 2028.  There are three strategic objectives of the PDP:  1) Traffic Decongestion Program; 2) Seamless and Inclusive Connectivity via National and Local Linkages; and 3) Resilient and Sustainable Communities.  Under first objective, the following are the necessary construction projects:  a) High-standard highways and expressways; b) By-pass and diversion roads; c) Flyovers, interchanges and underpasses.  For the second objective, the following have to be addressed:  a) Daang Maharlika Highway (N1); b) Inter-island linkage bridge program; c) gaps and missing links along national roads; d) nautical highway network; e) Convergence programs with the Department of Tourism, Department of Transport, Department of Trade and Industry and the Department of Agriculture.  Hopefully this last objective can make a significant contribution to the  effective performance of the task assigned recently to Secretary Frederick Go who is assisting President BBM ensure that the policies and programs of the various agencies directly involved in economic development are in synch with one another so that the Philippines can effectively attract large amounts of FDIs into the infrastructure sector which has the potential of drawing in $15 to $20 billion of foreign equity funds.  A frequent complaint I get from potential foreign investors is that sometimes they get the impression that the right hand of the government does not know what the left hand is doing.  This is why I fully support the creation by President BBM of this new super-agency headed by Secretary Go.  To be continued.