Philippines’ DICT urges for more infrastructure to support Southeast Asia connectivity
An announcement made by the Department of Finance (DOF) emphasised on the significance of urgent development of transport infrastructures to boost economic expansion, increase income and improve cross-border connectivity.
DOF Secretary Carlos Dominguez III has emphasised the urgency of modernising transport infrastructure systems in Asia’s emerging economies in order to boost economic expansion and increase incomes.
Moreover, it will improve cross-border connectivity to accelerate efforts in building a common market in the region.
Sec Dominguez said developing transport infrastructure is critical especially for the island and archipelagic economic of Southeast Asia such as the Philippines. The country continues to face challenges regarding travel and the delivery of goods and services to remote populations.
Sec Dominguez attended the Asian Infrastructure Investment Bank (AIIB) Governors’ Business Roundtable held at the Regal Room of the Trident Hotel, India.
During the discussion, he said, “Transport infrastructure is clearly our most urgent need. It immediately contributes to economic expansion and broadens the revenue base of countries. Businesses are able to improve productivity dramatically and households are able to improve incomes with the modernisation of transport infrastructure.”
Sec Dominguez added, “To be sure, strategic infrastructure projects are costly. We are building a strong basis for our infrastructure program by modernising our revenue systems, pursuing financial sector reforms intending to broaden participation and strengthening our banking system to enable capital accumulation.”
Dominguez explained. “But we will rely heavily on our development partners for strategic financing support.”
He said institutions like the AIIB can enable shorter tenors for the Philippines’ key projects. Moreover, it can provide more cost advantages compared to commercial funding sources by ensuring longer maturity and more favourable financing terms.
The Duterte administration plans to increase infrastructure investments from 6.3% of the gross domestic product (GDP) in 2018 to 7.3% by 2022 through its 75 flagship projects.
“It will greatly benefit emerging economies such as ours if our development partners are able to include a grant element of 25% and superior access to knowledge, experience, and technology,” Sec Dominguez said.
He also said that recipient economies expect development institutions like the AIIB to help them obtain the best advantage by expediting the processing of financing packages without compromising the quality of project preparation and implementation.
He added, “We look to the AIIB for more immediate and longer-term financing that will guarantee the success of our infrastructure investment program and the strong expansion of our domestic economies.”
26 infrastructure projects across Asia have been approved by the AIIB Board of Directors as of 11 April 2018. The bank will be financing these projects amounting to around US$4.52 billion.
The Metro Manila Flood Management Project Phase 1 (MMFMP1), is the first project co-financed by AIIB with the World Bank in the Philippines. This was signed in December 2017 and declared effective on 15 March 2018.
A recent announcement highlighted the Philippines’ participation in the annual AIIB Board of Governors Meeting. Sec Dominguez will be representing the country and will be involved in the discussions in ensuring a sustainable future for Asia through sound infrastructure investments.