Infra or pandemic aid? Gov't faces 'trade-off' says House think tank

ABS-CBN News

Posted at Jul 22 2020 10:46 PM

A young boy gathers scrap plastic materials from the Pasig river near the construction site of the BGC-Ortigas Center Road bridge linking Lawton Avenue in Makati and Sta. Monica street in Pasig City on May 25, 2020. George Calvelo, ABS-CBN News

MANILA - A Congressional think tank said on Wednesday that the government’s flagship infrastructure program, which was already facing “serious delays” before the pandemic, now faces even more difficult challenges ahead because of the COVID-19 crisis. 

The Congressional Policy and Budget Research Department (CPBRD) said the Duterte administration is “facing a trade-off” between pursuing its "Build, Build, Build" program “and the more urgent COVID-19 responses.” 

The CPBRD said given its scarce resources, the government may need to choose if it wants to either continue large-scale infrastructure projects or provide cash aid to affected households, workers and businesses. 

Tax revenues have been hard hit by the lockdowns imposed to check the spread of the virus, the CPBRD said, while spending has ramped up as the government sought to provide aid to affected sectors. 

“From January to May 2020, tax revenues dropped by 23.9 percent to P891 billion from P1.2 trillion in the same period in 2019, while the budget deficit swelled by 69,420 percent to P562.2 billion from January to May 2020 from merely P809 million in the same period last year,” the think tank said. 

The CPBRD noted that even before the pandemic hit, the Build, Build program was already facing delays in completion due to lack of technology, right-of-way acquisition problems, poor project preparation and identification, technical capacity deficits, lack of coordination among agencies, and procurement issues.

Last year, ABS-CBN News reported that out of the Duterte administration’s original 75 flagship projects worth over P8 trillion, only 2 had been completed worth just P1 billion.

These delays pushed the government to modify the program from 75 flagship projects to 100 projects including those which are already undergoing implementation and those which were developed and conceptualized in previous administrations, the CPBRD said. 

The House think tank also said poor absorptive capacity continue to confront major infrastructure implementing agencies which have impeded the completion of vital infrastructure projects. 

Tapping the private sector may not be so easy due to the effects of the pandemic on businesses, the think tank said.

“Big businesses, which the government intended tap in the financing and implementation of public-private partnership (PPP) projects, have also been facing significant losses as a result of the COVID-19 pandemic which casts doubts in the completion of many planned BBB projects." 

The House think tank also noted that the new Build, Build program “unfortunately has no health-related infrastructure projects.” 

The CPBRD added that after the COVID-19 crisis highlighted the need for better IT infrastructure, there were “only six ICT projects amounting to P55.8 billion” under the new Build, Build.

“None of these ICT projects, however are intended to address the huge internet connectivity problem in the country which could help accelerate digitization of the economy in the post-COVID-19 period.” 

The CPBRD said because of these challenges, the “government should support and implement policy reforms that would ensure a conducive environment for both public and private investments in the infrastructure sector especially in the post pandemic era.” 

It recommended the enactment of the Public-Private Partnership Act, the National Transport Policy, the Amendments to the Right-of-Way Law and the Sustainable Transportation Act.

“As the end of the Duterte’s regime draws closer in 2022, revisiting and reconfiguring once again the BBB program would mean that there is so much catching up to do in the next two years to ensure that this centerpiece program could deliver on its promise of putting in place the “Golden Age of Philippine Infrastructure” and significantly improve the lives of the Filipino people,” the think tank said.