Philippine Daily Inquirer, 18 November 2013
By Michelle V. Remo
The government is poised to increase its infrastructure-spending program next year by P60 billionâ€”and is considering raising the budget deficit ceiling as a consequenceâ€”to meet the expenditure needs in the aftermath of the latest natural calamity.
In particular, economic officials intend to raise the proposed budget for infrastructure for 2014 from the original P360 billion to P420 billion, or from 3 percent to 3.5 percent of the countryâ€™s projected gross domestic product (GDP).
Economic Planning Secretary Arsenio Balisacan said the additional budget for infrastructure could be made possible mainly by shifting portions of the budget allocations for less important expenditure requirements.
However, he said the government was also open to raising its expenditure and budget-deficit ceilings for 2014 if doing so would be deemed necessary.
Under the original fiscal program for 2014, the government was to work on a P2.268-trillion national budget and incur a deficit not exceeding P266.2 billion.
Balisacan, who is also director general of the National Economic and Development Authority (Neda), said rehabilitation and reconstruction of areas devastated by supertyphoon â€śYolandaâ€ť was expected to be â€śvery costly.â€ť As such, he said, substantial additional funding was necessary.
Nonetheless, the countryâ€™s chief economist said raising money to rebuild the affected areas would not be a major problem because the relatively favorable fiscal position of the government would allow it to incur a higher budget deficit without getting penalized by the financial markets through higher interest rates.
â€śIf we have to raise the budget-deficit [ceiling], that will not be a problem and the markets will understand that,â€ť Balisacan told reporters Friday at the sidelines of the annual meeting of the Philippine Economic Society.
Balisacan said the creditworthiness of the Philippines, which earlier this year got its first investment grades from major international credit watchdogs, was not expected to be dragged by the latest calamity.
He said foreign creditors, led by multilateral agencies, were in fact willing to extend highly concessional loans to help fund the countryâ€™s rehabilitation and reconstruction requirements.
The Philippine government has been able to reduce the proportion of its outstanding debt to the countryâ€™s GDP over the years on the back of various tax and administrative reform measures.
From a peak of more than 70 percent in 2004, the governmentâ€™s debt-to-GDP ratio had fallen year after year to just 50 percent in 2012.
Given this backdrop, Balisacan said the Philippines would not find it difficult to access the international financial market for funds.
Meantime, Balisacan said economic agencies of the government were already in the process of developing a rehabilitation and reconstruction plan for areas affected by â€śYolanda,â€ť particularly those in the Visayas regions.
Business World, 12 September 2013
By L.C.S. Marasigan
â€śWe have submitted the report to the NEDA Board. The report consists of the answers to the queries and the information [the Board] requested. It should be part of the agenda in the next NEDA Board meeting, which should be next week,â€ť DoTC Secretary Joseph Emilio A. Abaya said in a text message Thursday.
Mr. Abaya said that he is bullish that President Benigno S. C. Aquino III, who heads the NEDA Board, will approve the report to get the project rolling.
â€śIt isnâ€™t a toss of a coin. Iâ€™m quite confident that it will be approved since the queries were only clarification and comparative data,â€ť he said.
The report was â€śbasically a comparison of unit costs of rail projects requested by the NEDA Board,â€ť Mr. Abaya said, referring to the project cost, scope and railway fares of MRT-7 versus those of Light Rail Transit (LRT) Lines 1 and 2 and the MRT-3.
He would not, however, go into more details.
Asked when San Miguel Corp., the contractor of MRT-7, can start the project, Mr. Abaya replied: â€śLetâ€™s wait for the Boardâ€™s decision.â€ť
MRT-7 has a projected cost of $1.5 billion. The project will entail the construction of 14 train stations from San Jose del Monte, Bulacan, to North Avenue, Quezon City.
It will be connected to the current MRT-3 and LRT-1 lines via a common station on Epifanio delos Santos Avenue.
Earlier, the Joint Foreign Chambers urged the Aquino government to fast track its transportation projects, particularly the LRT-1, LRT-2, and MRT-7 projects, to ease the increasing traffic congestion in Metro Manila.
â€śThe present administration has less than three years to make the LRT-1 extension project operational. The MRT-7 light rail project and the LRT-2 east extension, along with the LRT-1 south extension, are rail transportation projects urgently needed in Metro Manila, where vehicular traffic is increasingly congested,â€ť the chambers said.
Business Mirror, 11 September 2013
By Lenie Lectura
The Department of Transportation and Communications (DOTC) is awaiting the National Economic and Development Authority (Neda) Boardâ€™s approval for the start of construction of the Metro Rail Transit (MRT) Line 7 to be undertaken by San Miguel Holdings Corp.
The inter-agency Neda Board is chaired by President Aquino.
â€śThe MRT 7 is now with the President. Once the Neda Board gives its approval then we will issue the notice to proceed,â€ť Transportation Secretary Joseph Emilio Abaya said in a text message.
San Miguel Holdings Corp., the proponent of MRT 7, is already eager to start construction of the $1.2-billion railway system.
The conglomerate had awarded to the Marubeni-DMCI consortium the contract for the engineering, procurement, construction and commissioning of the railway project.
The MRT 7 project involves the construction of a 22-kilometer train line with 14 stations traversing North Avenue, Elliptical Road, Commonwealth Avenue, Quirino Avenue and San Jose del Monte in Bulacan.
â€śWe have forwarded a memo to the President as directed by the Neda, addressing the unit cost comparison of the various rail projects,â€ť Abaya said.
According to the DOTC chief, the Neda wants a comparison of the project cost, project scope and possibly the railway fares of MRT 7 as against MRT Line 3 and LRT (Light Rail Transit) Lines 1 and 2.
â€śJust a check to make sure that prices are relatively the same. When we compared, it seems to be similarly priced on unit costs,â€ť Abaya said when asked why there was a need to compare the proposed MRT 7 project versus the existing railway lines in the metropolis.
He said it was the Neda Board which asked the DOTC to submit a report on it. â€śI think once approved by the Neda Board we can then issue the notice then thatâ€™s the green light,â€ť added Abaya.
The government is carefully scrutinizing the contract to ensure there will not be a repeat of the MRT 3 case, in which the government has already spent some P75 billion in subsidy for the past 10 years.
The loans incurred by the consortium that built the MRT 3, Metro Rail Transit Corp., were backed by the governmentâ€™s sovereign guarantee similar to the Independent Power Producers contracts in the power industry, which carried â€śtake-or-payâ€ť provisions guaranteeing profit for the investors.
Universal LRT Corp. held the right to develop the MRT 7. However, in 2010, San Miguel acquired a 51-percent interest in Universal LRT, which used to be owned by Israeli businessman Eli Levin before he sold it to businessman Salvador Zamora II.
The project has been delayed for about five years now because of the failure of the proponent to secure a performance undertaking from the Department of Finance (DOF). A performance undertaking is crucial so the MRT 7 proponent can secure financial closure for the project.
The Daily Tribune, 2 September 2013
The Philippines will increase spending on infrastructure projects crucial in attracting more investments, according to the National Economic and Development Authority (Neda).
â€śNotwithstanding the challenges of implementing public-private partnership projects or PPPs, both the government and private sectors continue to invest heavily in infrastructure, which has been a critical constraint to development,â€ť said Neda director general Arsenio Balisacan.
Balisacan said the construction sectorâ€™s strong performance as well as of manufacturing mainly boosted the industry sector to grow 10.3 percent in April to June this year.
Construction for the past the past five quarters grew double digits.
In the second quarter this year alone, public and private construction grew by 31.1 percent and nine percent, respectively.
The industry and services sectors were the main drivers of the countryâ€™s economy that grew 7.5 percent in the second quarter.
This is the fourth consecutive quarter that the Philippine gross domestic product has been expanding above seven percent.
â€śCan we sustain the growth? Yes, if we have to invest now in the infrastructure. Otherwise, you are going to overheat quickly,â€ť he said.
Balisacan noted that infrastructure like power systems and transport will reduce the cost of doing business in the country.
â€śIf we donâ€™t address this problem, the cost of doing business in this country will rise,â€ť he said.
Apart from basic infrastructure, Balisacan said other factors that affect investment decisions are the countryâ€™s quality of institution including the regulatory system, and macroeconomic fundamentals.
The latter factor pertains to inflation, interest rates and current account.
In 2014, the government is allocating P399 billion for public infrastructure projects.
The amount is 35 percent more than the P295 billion earmarked for this year.
â€śThe dramatic surge in infrastructure spending next year will lower the cost of transporting goods and people, support agricultural productivity, reduce risks from disasters and generate economic investments and employment,â€ť the Neda chief earlier said.
Balisacan said the infrastructure program aims to remove constraints to inclusive development, noting â€śthe proposed projects will ultimately benefit the poor and vulnerable sectors.â€ť
Manila Bulletin, 10 August 2013
ByÂ Mark Anthony N. Manuel
City of San Fernando, Pampanga â€” The National Economic and Development Authority (NEDA) Board Committee on Infrastructure (Infracom) has given its seal of approval for the development of some 36,000 hectares in the Clark Freeport and Special Economic Zone into a new city half the size of Metro Manila, the state-owned Bases Conversion and Development Authority (BCDA) announced Thursday. The P59-billion Clark Green City project is the first of this magnitude that will be undertaken in the history of the country in a bid to decongest Metro Manila. BCDA explained that by developing the area, which is at the moment idle land, BCDA would be able to unlock the value of the land that will benefit not only the people in Central Luzon but the rest of the country as well.
Manila Standard Today, 30 July 2013
By Lailany P. Gomez
The Transportation Department reset the deadline for the submission of bids for the P60-billion Light Rail Transit Line 1 Cavite extension project to give prequalified bidders more time to prepare documents.
The agency said in a general bid bulletin posted on its Web site it would give the four prequalified bidders until Aug. 15 this year to submit their bid proposals. This was extended 15 days more from the previous July 30 deadline.
â€śIn order to allow bidders ample time to prepare their bid proposals after the release of the concession agreement, please be notified that the bid proposal submission date is hereby extended to August 15,â€ť Transportation Undersecretary Jose Perpetuo Lotilla said.
The agency said it granted the request of two bidders who had asked for the extension.
The Transportation Department and the Light Rail Transit Authority met with representatives of DMCI Holdings Inc., Light Rail Manila Consortium, the consortium of SMC Infra Resources Inc. and MTD Samsung Consortium in April to give them the chance to bring up their questions and comments on the draft concession agreement, which would eventually be awarded to the winning bidder.
The Transportation Department said this would enable the bidders to better prepare their respective bid proposals.
â€śHaving a clear understanding of the concession agreementâ€™s provisions will help the qualified bidders come up with the most competitive proposals for the project,â€ť the agency said earlier.
At least 33 companies purchased invitation documents for the LRT extension project, but only six groups submitted qualification documents.Â The Transportation Department said only four had qualified to bid for the project.
The Cavite extension project, which the National Economic and Development Authority approved in March 2012, aims to increase the span of Line 1 from 20.7 kilometers to 32.4 kilometers and will have a new south endpoint in Niog, Bacoor, Cavite.
The extension includes eight stations, with provision for two future stations, 10.5 kilometers of viaduct, support beams and three intermodal facilities.
About 10.5 km. of the Cavite extension will be elevated and 1.2 km. will be at grade level. The government allotted P30 billion to acquire up to 39 new light rail vehicles for the project.
Business Mirror, 29 July 2013
By Ashley Manabat
CLARK FREEPORTâ€”Some P7.2 billion now awaits the approval of the National Economic Development Authority (Neda) earmarked for the expansion of the Clark airportÂ Â terminal to handle 15 million to 20 million passengers annually before the term of President Aquino expires in 2016.
This was revealed by neophyte Rep. Joseller â€śYengâ€ť Guiao of the first district of Pampanga at the Balitaan forum of the Capampangan in Media Inc. at the Bale Balita here on Friday.
Guiao said as soon as he got wind of the proposed Clark terminal funding, he searched for it in the budget but failed to locate it. He said he immediately called up Clark International Airport Corp. (CIAC) President and Chief Executive Officer Victor Jose â€śChichosâ€ť Luciano and told him the money is yet to secure budgetary allocation.
During the course of the Balitaan forum, however, Guiao was interrupted by a call from Luciano who told him that the funding is in the unprogrammed budget of the Department of Budget and Management (DBM).
â€śMaka prioritize ya kanu yng terminal [The terminal is being prioritized]. The only reason it is not included in the budget is because the Neda has not yet approve it. So the Department of Transportation and Communications [DOTC] placed the initial P3.6 billion to the DBM [Department of Budget and Management] so that when the Neda approval is out, it can be pulled out from the DBM,â€ť Guiao said.
â€śIt [terminal] has been prioritized by the DOTC. That was Lucianoâ€™s explanation so that it can be started in 2014,â€ť Guiao added.
He said this will be done â€śbefore P-Noy leaves office. Payari ne pu ita. â€™Yang peka legacy na [He (President Aquino) will have it done. That will be his legacy],â€ť Guiao said.
The fund will be divided into two P3.6- billion tranches to be given starting this year.
In the meantime, Guiao said some P270 million is earmarked for the upgrade of CIAC equipment.
In a related development, Guiao said the Central Luzon bloc led by Capampangan congressmen plan to champion the cause of Clark by calling for a Clark summit sometime in October.
He said it is important to â€śhave a concrete effect on Clark.â€ť Guiao added that, â€śItâ€™s high time to have a Clark summit [by October] with all its stakeholders, locators, investors, Clark Development Corp., local government units, as well as chamber of commerce and industries involved.â€ť
He said his staff are now preparing and studying documents on Clarkâ€™s mission and aspirations to be presented to concerned agencies and officials.
Guiao said the Clark summit will involve the whole gamut, including Clark as a sports, leisure and medical tourism haven.
The summit will come out with the creation of a technical working group to promote Clark, among others, he said.
The proposed bill for the creation of a new metropolis and Clark as the most logical choice even if it will not materialize will create and draw attention to our cause, he said.
Another proposal is to file a resolution urging the national government to bring back the North Rail Project that was deferred because of contract problem and squatters issues.
â€śSo much effort and money have already been spent. Itâ€™s only right to restudy the North Rail project,â€ť he said.
Guaio also said business tycoon Manny V. Pangilinan has modified his proposal for a fast train from Manila to Clark.
Initially, Pangilinanâ€™s proposal is limited to passengers on a fast train. But now, Guiao said, the business magnateâ€™s proposal also includes a regular commuter train alongside the fast train which can ferry cargo and goods.
Manila Standard Today, 29 July 2013
By Jennifer Ambanta
The National Economic and Development Authority said wealth sharing between the Moro Islamic Liberation Front and the national government can pave way for inclusive growth in Mindanao.
Neda Region XI director Maria Lourdes Lim, who is also chairman of the government technical working group on wealth sharing, said in a statement the recently signed agreement would result in economic development, especially to the Bangsamoro teritory.
â€śThe wealth sharing accord will allow the Bangsamoro to attain financial independence and enable it to steer its own growth and development,â€ť Lim said.
She said the agreement highlighted the provisions on official development assistance, the establishment of the intergovernmental fiscal policy board, a Bangsamoro auditing body and the formulation of a Bangsamoro development plan as among the mechanisms that would help spur investment and open up socioeconomic opportunities in the area.
Lim saidÂ investors had expressed interest to develop areas in Mindanao after the signing of the framework in October last year. International missions have visited Mindanao to explore potential investments in agriculture, housing, real estate, hotels and resorts. The Bangsamoro can engage with potential investors through public-private partnerships and ODA, said Lim.
She said government oversight agencies such as the Departments of Finance, Budget and the Neda might be involved in the proposed Intergovernmental Fiscal Policy Board, which ensures the attainment of fiscal autonomy of the Bangsamoro.
â€śThe Annex provides that the central government will have a representation in the board. While the list of membership has yet to be outlined, the oversight agencies will most likely be actively involved in it,â€ť said Lim.
The Intergovernmental Fiscal Policy Board, according to the Annex, will be composed of representatives from selected ministries of the Bangsamoro government, as well as from the central government. It will undertake periodic review of the taxing powers, wealth sharing arrangements and revenue sources needed to implement programs and projects in the region.
Apart from this, Lim said the Neda may provide technical assistance to the Bangsamoro government in the formulation of development plans.