The Philippines’ overdue make-over

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its-more-fun-commuting“The Philippines is like this incredibly beautiful girl that didn’t know how to dress up,” Secretary of Tourism Ramon Jimenez, Jr recently told me.

For all its unspoiled verdant hills and seemingly endless surface area of white sand, the Philippines does indeed come off as a gritty girl who rushed herself out of bed in the morning, especially to visitors who come through the Ninoy Aquino International Airport (NAIA) Terminal 1, rated the worst airport in Asia.

It is unarguable that the Philippines is well overdue for a make-over that addresses the stifling infrastructure issues that belie its natural appeal and hinders development in everything from gaming to the country’s nascent manufacturing industry.

However, despite the mounting problems attached with poor infrastructure and the negative image it breeds, only $9.6 billion of government spending was allocated to infrastructure in 2013, or roughly 3 per cent of GDP compared to a Southeast Asian average of 5 per cent.

This needs to dramatically change and the crossroad may just be in sight.

In the halls of Malacañang Palace, the home of the Philippine president, the country’s unsavory reputation for lacking the support of fundamental buildings blocks has become shifted to the top of the agenda.

President Benigno Aquino III recently outlined a three-pronged developmental approach to priortise agriculture, tourism and transport infrastructure, placing a particular emphasis on the shoddy irrigation systems, poorly planned airports and congested highways that plague the nation.

According to Secretary Jimenez, the Department of Tourism is working with the Department of Public Works and Highways (DPWH) under a segregated budget devoted just to roads necessary to tourism development. In 2013, this project will allocat $300 million, part of a total of $1.85 billion that will be spent over the next four years on tourism infrastructure.

Pieces of this budget will be used to build roads in remote areas of the country to provide access to emerging tourism destinations.

“Over the next three years, San Vicente will be the beneficiary of tremendous infrastructure investment that will guarantee access, including a tourism road connection to the island’s main artery, which – by national policy – must be constructed to national standards,” Secretary Jimenez said of the Palawan beach, which measures 14 to 15 kilometers of white sand compared to Boracay’s four.

More funds for infrastructure are being earmarked by the state-owned Government Service Insurance System (GSIS), the Philippines’s largest pension fund. Through the Philippine Investment Alliance for Infrastructure (Pinai), a fund set up in partnership with the Asian Development Bank, GSIS plans to spend $625 million in a move to diversity away from bonds into brownfield and greenfield projects across the infrastructure sector.

Yet more projects have been pushed in the country’s Private-Public Partnership (PPP) programme, which now boasts a burgeoning pipeline of over 20 projects, with a value of at least $7.4 billion.

Among the list of projects currently in live bidding include the Naia Expressway, a highway that will connect Manila’s Entertainment City to the airport; the much-anticipated Mactan-Cebu International Airport Terminal; and the rehabilitation, operation and management contract for the Angat Hydroelectric Plant.

Additionally, private investors planning to work with the Philippines’ PPP programme can also access the ASEAN Infrastructure Fund, which the ADB has committed to lend some $300 to $400 million to a year for ASEAN’s key infrastructure projects. Through this mechanism, investors can apply for a safeguard that will project long-term tenors against uncertainties, such as political change.

With all the future proposals of infrastructure spending lined up and supportive investment tools in operation, the Philippines could be on the cusp of greater change in image. Investors just need to pick up the brush.

 

 

 

 

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Reading Time: 3 minutes

“The Philippines is like this incredibly beautiful girl that didn’t know how to dress up,” Secretary of Tourism Ramon Jimenez, Jr recently told me.

Reading Time: 3 minutes

its-more-fun-commuting“The Philippines is like this incredibly beautiful girl that didn’t know how to dress up,” Secretary of Tourism Ramon Jimenez, Jr recently told me.

For all its unspoiled verdant hills and seemingly endless surface area of white sand, the Philippines does indeed come off as a gritty girl who rushed herself out of bed in the morning, especially to visitors who come through the Ninoy Aquino International Airport (NAIA) Terminal 1, rated the worst airport in Asia.

It is unarguable that the Philippines is well overdue for a make-over that addresses the stifling infrastructure issues that belie its natural appeal and hinders development in everything from gaming to the country’s nascent manufacturing industry.

However, despite the mounting problems attached with poor infrastructure and the negative image it breeds, only $9.6 billion of government spending was allocated to infrastructure in 2013, or roughly 3 per cent of GDP compared to a Southeast Asian average of 5 per cent.

This needs to dramatically change and the crossroad may just be in sight.

In the halls of Malacañang Palace, the home of the Philippine president, the country’s unsavory reputation for lacking the support of fundamental buildings blocks has become shifted to the top of the agenda.

President Benigno Aquino III recently outlined a three-pronged developmental approach to priortise agriculture, tourism and transport infrastructure, placing a particular emphasis on the shoddy irrigation systems, poorly planned airports and congested highways that plague the nation.

According to Secretary Jimenez, the Department of Tourism is working with the Department of Public Works and Highways (DPWH) under a segregated budget devoted just to roads necessary to tourism development. In 2013, this project will allocat $300 million, part of a total of $1.85 billion that will be spent over the next four years on tourism infrastructure.

Pieces of this budget will be used to build roads in remote areas of the country to provide access to emerging tourism destinations.

“Over the next three years, San Vicente will be the beneficiary of tremendous infrastructure investment that will guarantee access, including a tourism road connection to the island’s main artery, which – by national policy – must be constructed to national standards,” Secretary Jimenez said of the Palawan beach, which measures 14 to 15 kilometers of white sand compared to Boracay’s four.

More funds for infrastructure are being earmarked by the state-owned Government Service Insurance System (GSIS), the Philippines’s largest pension fund. Through the Philippine Investment Alliance for Infrastructure (Pinai), a fund set up in partnership with the Asian Development Bank, GSIS plans to spend $625 million in a move to diversity away from bonds into brownfield and greenfield projects across the infrastructure sector.

Yet more projects have been pushed in the country’s Private-Public Partnership (PPP) programme, which now boasts a burgeoning pipeline of over 20 projects, with a value of at least $7.4 billion.

Among the list of projects currently in live bidding include the Naia Expressway, a highway that will connect Manila’s Entertainment City to the airport; the much-anticipated Mactan-Cebu International Airport Terminal; and the rehabilitation, operation and management contract for the Angat Hydroelectric Plant.

Additionally, private investors planning to work with the Philippines’ PPP programme can also access the ASEAN Infrastructure Fund, which the ADB has committed to lend some $300 to $400 million to a year for ASEAN’s key infrastructure projects. Through this mechanism, investors can apply for a safeguard that will project long-term tenors against uncertainties, such as political change.

With all the future proposals of infrastructure spending lined up and supportive investment tools in operation, the Philippines could be on the cusp of greater change in image. Investors just need to pick up the brush.

 

 

 

 

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