Philippines to invest 768 billion pesos on 114 infra projects in next two years

The Philippine government would invest P768.81 billion to implement 114 core strategic projects over the next two years with the infrastructure program having biggest share of 82.7 percent or 635.84 billion, followed by social development with six strategic projects worth P53.10 billion and agriculture and fisheries with 10 projects worth P39.08 billion.

National Economic and Development Authority (NEDA) deputy-director Rolando Tungpalan revealed that some of the big ticket projects that the government will be implementing within the next two to five years include the North-South Commuter Railway, the improvement of major airports for Iloilo, Davao and Bacolod; and Davao Sasa port modernization, for the transport sector; the Bulacan Bulk Water Supply Project, new centennial water source – Kaliwa Dam, the Water District Development Sector Project and the National Sewerage and Septage Management Program; and the Clark Green City (CGC) to be implemented by the Bases Conversion and Development Authority (BCDA).

The Clark Green City is aimed at converting and developing about 9,450 hectares of land into a self-sufficient and self-sustaining green and intelligent city situated within the Clark Special Economic Zone (CSEZ) at an estimated cost of P607.34 billion.

Tungpalan said these projects are components of a wider range of investment requirements as identified in specific roadmaps developed by the government aimed at rationalizing investments for quality and responsive programs and projects.

The transport roadmap for Metro Manila and its environs, for instance, identifies 115 projects with an estimated investment requirement of Php 2.61 trillion aimed at reducing congestion and transport-related pollution emissions until 2030.

The P343.1 billion flood management master plan for Metro Manila and surrounding areas aims to provide a sustainable and effective flood risk management (FRM) in Metro Manila and surrounding areas until the year 2035.

Other roadmaps and master plans include the DPWH and Department of Tourism (DOT) convergence plan that will provide road access to designated priority tourism destinations under the National Tourism Development Plan (NTDP) and the survey on Mindanao Logistics Infrastructure (SMLIN) which aims, among others, to maximize the utilization of the Mindanao Container Terminal (MCT) to become the node of logistics and the center of economic development in Northern and Central Mindanao.

To further ensure the quality of programs and projects, under the General Appropriations Act (GAA) – fiscal year 2014, NEDA was tasked to administer an initial P400 million feasibility study fund to be used exclusively for the conduct of feasibility studies for non –PPP projects.

Tungpalan said the fund aims to support proposed pre-investment activities or feasibility studies for projects/programs of the government.

Currently, NEDA is in the process of procuring consultants for the conduct of four feasibility studies for various projects with a total budget of P202 million.

For the remaining P198 million, there are 34 proposals in the pipeline, with a total budge P1.98 billion, to be processed by NEDA for the second batch of the NEDA board committee on infrastructure approval.

On the other hand, the Project Development and Monitoring Fund (PDMF) has been established for the conduct of feasibility studies for solicited PPP projects of the government.

Tungpalan also stressed the significance of balanced budget under the Philippine Development Plan (PDP) without compromising the realization of development goals and thrusts.

Greater support for Asian farmers needed

The National Economic and Development Authority (NEDA) has called for greater support and opportunities for small farmers in Asia to enable agricultural workers to take part in the growth process.

Economic Planning Secretary Arsenio M. Balisacan made the call in a recent video message for the 8th International Conference of the Asian Society of Agricultural Economists (ASAE) at the BRAC Center for Development in Savar, Bangladesh.

Balisacan said that despite their size, the importance of small farms cannot be overlooked as countries in Asia are among those with an overwhelming panorama of small farms.

The latest statistics from the World Census of Agriculture reported that 90 percent of about 428 million agricultural landholdings in Asia are small farms, which are less than two hectares in area.

“In Asia, which is home to around 4.4 billion people, including two-thirds of the world’s undernourished, majority of people living in poverty rely on these small farms for food.  Further development of the agriculture sector, specifically the small farms that constitute it, could redound to rural welfare improvement and poverty alleviation,” said Balisacan.

He also noted that although the role of agricultural performance in reducing rural poverty may be less clear today that it was during the Green Revolution period, there are remaining areas for policy interventions that can strengthen smallholders’ agricultural performance for them to continue their role as backbone of rural economies and key vehicle for more rapid poverty reduction.

“Smallholders are not a homogeneous group.  Some of them have the potentials to improve production performance and be transformed into commercially-oriented and profitable farming systems. These smallholder farmers need a policy environment that would support and nurture this transformation and help them overcome the challenges they face,”

Balisacan said that small farms are the major sources of raw materials for agribusiness and manufacturing industries and that agricultural commodities geared for exports are good sources of foreign exchange earnings to finance capital accumulation needed for industrialization.

“As the economy goes through an industrialization process, agricultural workers, especially during off-planting and harvesting seasons, are often employed in other sectors as contractual or part-time workers.  And as agriculture modernizes and links with the industry and services sectors to increase value adding in agricultural production, more remunerative jobs are created. The range of products and services becomes wider, and markets expand,” Balisacan explained.

Balisacan recommended policy levers to further develop the initial conditions that would facilitate pro-poor growth.

“Interventions should be focused in improving farm productivity, especially in areas where topography is not conducive to agriculture. It is also very important to facilitate the linkage of smallholders to supply chains and markets and overcome the threat of climate change,” he said.

Balisacan also cited that agricultural investments in adaptation to help farmers improve land management, adjust their planting dates, and introduce new crop varieties are increasingly becoming important.

“The increasing complexity and diversity of the environment in which smallholders now exist would not warrant a single policy, but rather a mix of interventions. What is important is that these interventions holistically address the needs of the poor in the agricultural sector and expands opportunities for smallholders to take part in the growth process,” Balisacan added.

The ASAE International Conference is conducted every three years, and participated in by agricultural economists, development practitioners, policymakers, academicians, researchers, and students from all over the world.

The 2014 conference was intended to address issues on wages, constraints in agricultural investment, adoption of improved technologies and productivity, and public policies to address constraints of small farms in Asia.

Philippine civil societies urge government to address root causes of poverty

More than 100 Philippine civil society organizations including the Caucus of Development NGO Networks (CODE-NGO) and the Civil Society Counterpart Council for Sustainable Development (CSCCSD) have called on the government to address the root causes of poverty in the country.

The sustainable development goals (SDGs) crafted by the government will replace the Millennium Development Goals (MDGs) after its 2015 deadline.

“Even with 14 years of the MDGs and continuous economic growth, the poverty incidence remains practically unchanged.  This shows that the SDGs cannot be just more of the same”, said Sixto Macasaet, Executive Director of CODE-NGO.

In a recent conference, SD2015 Philippines has acknowledged the gains contained in the proposed SDGs in recognizing some of the issues and causes of poverty and underdevelopment.

However, the group has expressed concern with the inadequacy of the proposed goals and indicators to comprehensively and decisively address the underlying core issues essential for ending the struggle against poverty and in transforming societies through sustainable development.

They emphasized that as the government works with the other UN member-states in finalizing these new development goals in the coming one-year period for negotiations, it should always be guided by the 15 Sustainable Development (SD) Principles of Unity, which were agreed upon by civil society and the government in the Enhanced Philippine Agenda 21.

These SD principles are encapsulated in the development aspirations of achieving social justice and human rights, sustainability and inclusion.

The group also cited the need to ensure that climate justice is promoted and that developed countries and industries responsible for climate change causing carbon emissions give reparations to the affected countries for the damages caused by natural disasters such as Typhoon Ondoy and Yolanda.

SD 2015 Philippines also stressed that economic growth must be promoted only in the context of holistic development, and it should not sacrifice or negatively impact any other aspect of full human, social, and environmental development.

They further called on the government to define a meaningfully inclusive and participatory process in the national and international agenda setting processes for the new global development goals and asked that the government open up its decision-making processes and help ensure that this new global development agenda will truly address the needs of the people.

“It cannot be just the Philippine government and other governments deciding on the SDGs”, explained Faith Ramirez, coordinator of CSCCSD, “they must also involve the citizens and CSOs, and those CSOs should prepare for genuine participation. The SDGs are too important to be decided upon by just a few politicians and bureaucrats.”

The draft SDGs currently contain 17 goals to be attained by 2030 and more than 140 associated targets, meant to create an integrated agenda based on the three pillars of sustainable development – economic development, social development and environmental goals sustainability.

CODE-NGO and CSCCSD organized SD 2015 Philippines as part of an international engagement program run by Stakeholder Forum and CIVICUS, in collaboration with the UN Department of Economic and Social Affairs (UNDESA), to help stakeholders to input to the Post 2015 process and help build a more sustainable future.

Philippines hikes public infrastructure spending to 2.6 trillion pesos

The Philippine government would increase its public infrastructure spending to at least five percent of gross domestic product (GDP) in 2016 estimated at 2.06 trillion pesos.

Socio-economic Planning Sec. Arsenio Balisacan said the priority programs for the infrastructure sector consist of 952 projects to be supplemented by private sector investments through public-private partnerships (PPPs).

To optimize public-private partnerships and enhance the country’s attractiveness to private sector investors, the government has reviewed, amended and approved policies and legal framework involving private sector participation such as the IRR of the BOT Law (RA 7718) and the joint venture guidelines.

Reforms in the energy sector have also increased private sector participation. In July 2012, the Energy Regulatory Commission (ERC) approved the feed-in-tariff (FiT) rates to encourage renewable energy developers to invest at the initial stage and hasten deployment.

To improve competitiveness and geographic connectivity, the pocket open skies policy was issued in 2011, allowing foreign carriers to operate unilateral and unlimited traffic rights to airports other than the Ninoy Aquino International Airport (NAIA), said Balisacan.

The Common Carriers Tax (CCT) aims to enhance the country’s competitiveness in international travel by encouraging international air carriers to include the Philippines in their primary routes.

“On top of these policies, the government is pursuing the synchronization of planning, programming and budgeting to ensure that the programs and projects are aligned with the country’s developmental goals and outcomes,” said Balisacan.

“Sustaining the economy’s high-growth trajectory requires continued investment in infrastructure to unleash the potentials of many areas throughout the country.”

The Philippine government has encouraged the private sector to participate in the construction and implementation of various programs and projects that have been identified in a number of infrastructure-related roadmaps and master plans.

Some of the priority transport infrastructure programs include the Transport Infrastructure Development Roadmap for Metro Manila and its surrounding areas, the Logistics Infrastructure Roadmap for Mindanao, to improve logistics infrastructure for cost-effective linking of Mindanao’s agriculture and fishery production centers the DPWH and Department of Tourism (DOT) Convergence Plan, to provide road access to designated priority tourism destinations under the National Tourism Development Plan (NTDP).

Other approved infrastructure master plans include the  Flood Management Master Plan for Metro Manila and Surrounding Areas and the E-Government Master Plan (EGMP).

In the energy sector, the 2013-2017 Household Electrification Development Plan (HEDP) issued by the Department of Energy (DOE) sets the plans and strategies to attain 86.2-percent household electrification by 2016 and 90-percent by 2017, while the Philippine Energy Plan 2012-2030 targets 100-percent electrification of villages by 2015.

To promote energy conservation and energy efficient technologies, the Department of Energy (DOE) is implementing various activities under the National Energy Efficiency and Conservation Program (NEECP), while the National Renewable Energy Program (NREP) aims to develop specific technologies and help the country triple its renewable energy capacity by 2030.

Philippine inflation peaks at 4.9%

Philippine  inflation rate has peaked at 4.9% considering that rice harvests start in September and 500,000 metric tons (MT) of new imports begin to arrive in October, according to FMIC & UA&P Capital Markets Research.

The lifting of truck ban in Manila has eased the flow of food items to Metro Manila and other parts of the country, while crude oil prices are likely to continue their downward trend until the first half of 2015.

“The central bank is likely to have a pause as consistently softer inflation figures at 4.2% by year-end starting September. Besides, with the previous BSP measures clamping down on liquidity, money supply is likely to slide to a single-digit growth by November,” said FMIC & UA&P.

FMIC & UA&P expect another round of monetary policy tightening moves before the end of the year.

“We continue to see the peso having difficulty coping with the strength of the US dollar. The fundamentals and the technical indicators both show a depreciation bias for the rest of the year, with brief respites provided by OFW Christmas-related remittances.

FMIC & UA&P also expect a rally in peso-denominated bonds amidst stronger Philippine economic performance, falling domestic in­flation rates, and the continuing appeal of US Treasuries given its economy’s robust growth.

Faster second half economic growth with renewed government spending and stronger exports, should infuse greater optimism in the local financial markets, said FMIC & UA&P.

“We do not see much pressure from US T-bond rates ris­ing in the fourth quarter. At best, 10-year T-bonds are forecasted to hit 2.75% or some 40 basis points from the lowest levels reached the second quarter.”

FMIC & UA&P also expect a rush of corporate bond issuances in the fourth quarter as the backlog has been building up due to the need to satisfy regulatory requirements.

Good governance is crucial to sustainable economic growth

Good governance and macro-economic and political stability are crucial for sustainable economic growth in the implementation of the revalidated public investment program (PIP).

Socio-economic Planning Sec. Arsenio Balisacan stressed that the revalidated PIP which can now be accessed online, outlines the major government programs and projects that are expected to help achieve the targets under the updated Philippine Development Plan 2011-2016.

The updated version of the PIP takes into account the progress that the current administration has done and the challenges for the remaining years.

“We recognized that the real measure of progress is the improvement of the lives of our people,” said Sec. Balisacan.

He noted that the revalidated PIP helps ensure that public resources are channelled to investments that will yield the highest and most sustainable socio-economic benefits for the Filipino people.

“In effect, the revalidated PIP actualizes the necessary institutional changes and innovations to deliver lasting results that are felt by the people especially the poor,” said Balisacan.

The document also indicate a total estimated investment target of P4.19 trillion, where more than half of about 1,500 identified priority programs and projects are allocated for infrastructure development.

It also includes updates on the status of current and major programs and projects which started implementation in 2011 and the priorities for the remaining plan period 2011-2016, with emphasis on core investment programs and projects.

“We hope that the revalidated PIP will empower government agencies and development partners in implementing, coordinating, and complementing development projects across the country and will effectively serve its purpose as one of the nation’s instruments to achieve inclusive growth,” Balisacan added.