MANILA -- The Fitch Group's think tank arm, BMI Research, is seeing potential projects in transport infrastructure to help the government address poverty and achieve its goal of inclusive growth.
A study by BMI Research released Wednesday showed that the country’s transport infrastructure is projected to grow at an average of 8.4 percent annually from 2018 to 2022. It noted that the bulk of transport infrastructure activities in the country over the next five years will be road and rail projects, which are expected to improve connectivity in the archipelago.
BMI's report also mentioned that 28 out of 50 projects are identified as “high priority” by the Duterte administration. They include the construction of highways, bridges, as well as metro and commuter rails.
The report stated that USD34.9 billion worth of road projects and USD17.4 billion rail projects in the country are currently in the pipeline.
“In addition to highways and rail transit projects in Metro Manila region -- which has historically been the focus of the infrastructure development in the Philippines -- upcoming projects also include long-distance railways and urban transit systems in other cities and regions,” BMI said.
“This fits in with Duterte’s stated focus on developing the economies of regions outside Metro Manila and goal of reducing national poverty rate from the current 22 percent to 13 percent by 2022,” it added.
The study noted that road and rail networks are critical to improve logistics environment, while these also unlock greater growth across industrial, agricultural, and services sectors.
“In rural regions, the country’s below the average transport infrastructure poses challenges to supply chains and hinders the development of industry and agriculture,” the study read.
“Underdeveloped transport infrastructure continues to act as a drag on the economy of the Philippines, meaning that even modest improvements to transport infrastructure have the potential to unlock faster economic growth in the country,” the report stressed.
The think tank group also highlighted that the interest of foreign sources to finance transport infrastructure projects in the country will help in the timely delivery of the projects. It noted that the Philippines continues to benefit from the assistance of Japan, while the administration’s “pivot toward friendlier relations” with China sparked interests from Chinese government and companies to fund infrastructure projects in the country.
An example of this is government's partnership with CCCC Highway Consultants and China Road and Bridge Corp. to construct the USD100-million Binondo-Intramuros Bridge and Estrella-Pantaleon Bridge projects. Another is the USD100-million loan agreement between the government and Japan International Cooperation Agency to construct the 28-kilometer first phase of Metro Manila subway.
Aside from foreign sources, prospects from domestic companies are reportedly bright as well. The Manuel V. Pangilinan-led Metro Pacific Investment Corp. has announced its plan to raise USD115 million for the expansion of the North Luzon Expressways.
The Duterte administration has embarked on Build, Build, Build Program, involving 75 infrastructure projects across the country with infrastructure spending of around PHP8 trillion to PHP9 trillion until 2022. (PNA)
