The incoming government of presumptive President-elect Rodrigo Duterte is urged to pin down infrastructure, comprehensive tax reform, and foreign direct investments to distribute economic activities into the regions rather than continue concentrating them in Metro Manila.
This was raised at the launch of “The Report: The Philippines 2016” by the Oxford Business Group, which was attended by business leaders including, Francisco C. Sebastian, vice-chairman of Metropolitan Bank & Trust Company; Lea Roque, partner and head for tax of Punongbayan & Araullo; Guillermo D. Luchangco, chairman and CEO of ICCP Group, Crisanto Frianeza, Secretary-General of Philippine Chamber of Commerce and Industry (PCCI); and OBG’s Managing Editor for Asia Paulius Kuncinas.
On infrastructure, Sebastian said there is no problem with financing some infrastructure projects because the government has raised enough resources.
He said the country’s debt to GDP ratio of 48 percent would be sufficient enough to undertake these infrastructure projects that have been cleared by the Aquino administration. He said the Philippines’ debt to GDP ratio is a lot better than China’s 280 percent.
“We are rich,” he said adding that President Aquino has left 31 percent in unspent money. “The problem is how to spend the money, we’ve got to spend, spend, because PPP (Public Private Partnership) model is more expensive. It is a matter of executing the project,” said Sebastian.
The same suggestion was pushed by Kuncinas, who stressed that big infrastructure projects in other countries are not financed by the private sector and if private funds are required they must be accompanied by sovereign guarantees.
Kuncinas has urged that government undertake on its own some of the huge infrastructure projects and at the same time extend sovereign guarantee to projects that are up for private sector financing to fasttrack the implementation of the various infrastructure projects that have been cleared by the Aquino administration.
“The sovereign has to step up and guarantee the private sector or we will waste some years because connectivity is stifling the economy, including tourism, manufacturing, power, logistics …” he pointed out.
“It is not nice to make jokes about the everyday traffic because it is a huge drain on our resources,” Kuncinas added.
On FDI, Sebastian said the new administration has to look at the FDI, which is the amount of money committed by foreign investors, because it will determine the future of the nation.
“To know the future of the country, look at the FDIs,” he pointed out. The country’s FDI’s have reached $6 billion annually in 2014 and 2015. Although the amount of FDI still lags behind other countries in ASEAN, including Vietnam with $15 billion, Sebastian noted that this has tripled since the start of the Aquino administration.
As published in Manila Bulletin dated 14 May 2016 by Berie Magkilat