THE government is likely to struggle to complete most of the infrastructure projects on its flagship list before President Rodrigo R. Duterte steps down in 2022, largely due to slow implementation of foreign-aided loans and unresolved bottlenecks, the Economist Intelligence Unit (EIU) said.
“(EIU) maintains its view that the authorities will struggle to complete the bulk of its infrastructure agenda before the next presidential election in 2022,” it said in a report sent to BusinessWorld.
The rush to make up for a long-running infrastructure backlog remains hindered by the slow delivery of loans from foreign partners.
EIU said investment pledges by the Chinese government have been moving “at a languid pace” as only three projects woth $178.2 million have started, out of the $24 billion that President Rodrigo R. Durterte obtained commitments for in 2016.
It added that the Finance department has cited as factors China’s decision to use its own currency, the renminbi, in disbursing its loans instead of the dollar as well as “China’s demand that most work be given to Chinese contractors; and China’s unwillingness to co-operate with other lenders.”
In addition, it said official development assistance (ODA) loans from Japan need to go through “lengthy technical evaluation and public consultation processes” following Japanese rules.
It also cited the delayed passage of this year’s Philppine budget, which left new projects unfunded, as well as the 45-day public works ban ahead of the midterm elections in May.
“At the local level, projects suffer from the inherently exhaustive process of resident relocation, a dearth of technical expertise at local-government level and a lack of skilled workers, such as excavator operators. The latter shortage is explained by the thousands of such workers who prefer more lucrative employment in the Middle East,” the EIU added.
However, EIU said that more projects will be implemented now that the government has adopted more projects financed through public-private partnerships (PPP).
“Nevertheless, the shortage of local expertise and skilled workers, as well as red tape, such as constitutional limitations on foreign ownership of public utilities, work in the opposite direction, so there will be no quick fixes to the bottlenecks that plague the infrastructure programme,” it said.
The administration hopes to invest P8 trillion until 2022 to fund thousands of infrastructure projects under its “Build, Build, Build” program.
Projects selected for the infrastructure flagship program now number 100, up from 75 previously, after the list was revised to rule out those deemed not feasible while adding others that are considered to be high-impact.
In the new list, more than half are expected to be completed by 2022 while presidential adviser for the flagship infrastructure Vivencio B. Dizon said around 35 projects will be finished within the current Presidential term. — Beatrice M. Laforga