Infrastructure Development and Investment
in the Philippine Socioeconomic Agenda

Arsenio M. Balisacan, PhD
Secretary
National Economic and Development Authority

Philippine Economic Briefing
The Fullerton Singapore
15 June 2023 | 09:00 AM

 

Distinguished members of the business community,

My fellow government officials and colleagues, and all our esteemed guests, good morning!

Just like my colleagues here, I am delighted to be back in Singapore as the Economic Team conducts its second economic briefing in this dynamic and wonderful country. After the presentations by my colleagues, I would like to provide an overview of the socioeconomic agenda of the Marcos Administration for the Philippines, with a particular focus on infrastructure development and strategic investment priorities.

The Philippine socioeconomic agenda aims to address short-term issues and long-term constraints in job creation and poverty reduction. This agenda serves as the framework for the Philippine Development Plan 2023-2028, which is the Marcos Administration’s development blueprint for the medium term. The Plan provides the priority strategies, programs, and legislative measures that must be implemented to achieve the country’s socioeconomic goals. The PDP aims to reinvigorate job creation, accelerate poverty reduction, and drive economic and social transformation by 2028.

The Philippine government aims to implement interventions that will transform the country’s production and social sectors, as well as the institutional, regulatory, and physical environment. One of the many strategies in the PDP is to expand and upgrade the country’s infrastructure. The Marcos Administration recognizes this as a critical component of its development strategy, allowing the Philippines to catch up and become more competitive among its dynamic neighbors in Southeast Asia.

Historically, the country has not invested sufficiently in its backbone infrastructure, leading to the existing gaps. However, the Marcos Administration is committed to sustaining annual spending on infrastructure at around 5% to 6% of GDP from 2023 to 2028. This commitment translates to approximately 20 billion to 40 billion US dollars per year. We will focus on delivering essential projects, such as expressways, bridges, airports, railways, ports, energy, water and sanitation, telecommunications, logistics, and social infrastructure. These investments will reduce the cost of doing business, expand market opportunities, and foster job creation and innovation.

We have been diligently working to create an enabling regulatory policy environment for the investor community. As you are well aware, the Marcos Administration builds upon the reform momentum of previous administrations to further improve the country’s investment regime. Through these efforts, we have effectively implemented game-changing laws, enhanced transparency, predictability, and efficiency of business processes, and addressed investors’ concerns. However, our reform journey does not end here. More reforms are on the way to improve the country’s investment climate.

At the forefront of the Marcos Administration’s Build-Better-More Infrastructure Program are the 194 Infrastructure Flagship Projects or IFPs, collectively worth 148 billion US dollars. These projects are concentrated in physical and digital connectivity, as well as water resources, demonstrating our unwavering commitment to upgrading the country’s fundamentals. Notably, 93 IFPs, accounting for nearly half, are ongoing and approved for implementation, while 92 projects are undergoing project preparation and pre-project activities, including feasibility and pre-feasibility studies.

Of the 93 ongoing and approved IFPs, a total of 19 projects are expected to be completed within this year; while another 61 projects are projected to be completed by 2028.

Of the 101 projects that are for government approval and under project preparation, 35 of these are expected to be completed also by 2028.

These IFPs will be financed through diverse funding sources. Slightly over half of the financing will come from Official Development Assistance or ODA, while around 30% will be provided through Public-Private Partnerships, and various combinations thereof.

Indeed, the Philippine government considers the private sector an invaluable partner in achieving its socioeconomic agenda. The private sector serves as the engine of growth and innovation in the Philippines, and by leveraging its financial muscle, technological expertise, and managerial capacities, we can deliver better public services, lower consumer prices, and improve the quality of life for all Filipinos.

The Marcos Administration is promoting PPPs as a mode of financing the IFPs and other high-impact projects in physical, digital, and social infrastructure. These PPP opportunities encompass investments in transport and road projects, property development, health, water and sanitation, ICT, solid waste management, energy, and tourism.

Allow me to conclude by highlighting a few key points. What advantages await investors and businesses in the Philippines? Why should you choose the Philippines?

Firstly, we are home to a massive consumer base of over 110 million people contributing to the sustained high-growth trajectory of our economy. By 2025, the Philippines is expected to achieve upper-middle income country status, ensuring robust demand for goods, services, and experiences.

Secondly, we offer a competitive launching pad for accessing the ASEAN market and our trading partners through the RCEP or Regional Comprehensive Economic Partnership. This effectively expands your market size and provides competitive access to a wider range of input sources.

Thirdly, the Philippines is currently experiencing a “demographic dividend,” with a young working population growing faster than the overall population. This demographic dividend will serve as an additional growth pillar for the next two to three decades. In the experiences of our neighbors, the demographic dividend adds easily 1 to 2 percentage points more growth, and that’s what we are hoping to happen in the Philippines. And this is particularly appealing when considering the aging populations in developed economies.

In conclusion, I invite all of you to consider partnering with us and investing, especially through PPPs, in key infrastructure sectors such as energy, water, airports, logistics, telecommunications, expressways, and railways. Furthermore, we encourage you to explore exciting opportunities in our growth drivers, including agribusiness, mining, manufacturing, utilities, construction, tourism, education, creative industries, health, information technology, and business process management.

The Philippines is indeed more open for business than ever before, and we eagerly anticipate working with you to create a more prosperous, inclusive, and resilient economy.

Thank you and have a wonderful day!

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