In the World Economic Forum’s latest Global Competitiveness Index, the Philippines ranked 56th out of 137 countries. Despite moving up a notch from the previous year, the country still fell behind six of its ASEAN neighbors. One of the biggest impediments is a lack of investment in infrastructure: the index puts the Philippines 90th in terms of infrastructure ranking and warns that this is significantly undermining the country’s ability to compete globally.
Last year, President Duterte’s administration announced a “Build, Build, Build” initiative, pledging to usher in a “golden age of infrastructure” in the next five years as a response to a decade-long neglect in the infrastructure sector. The $180 billion program includes big-ticket items like new bridges and roads, a new terminal for Clark International airport, and the country’s first underground railway.
The impact of the infrastructure push is already making waves: despite the slowdown in agriculture sector, the Philippines posted an unexpected 6.9 percent economic growth in the third quarter of 2017, plunging it ahead of China and other neighboring ASEAN countries.
Albeit promising, much needs to be done to achieve this promised “golden age of infrastructure,” especially in terms of addressing the inequity in development and resource allocation at the local level.Albeit promising, much needs to be done to achieve this promised “golden age of infrastructure,” especially in terms of addressing the inequity in development and resource allocation at the local level. While the national government is increasing investment in infrastructure, planning remains fragmented as national government priorities do not always reflect or link with local economic development needs. The priorities outlined in the infrastructure program are focused on national-level impact, leaving gaps in investment in critical areas at the local level, including funds for local roads and maintenance, which have been virtually non-existence since 1991.
The Australian Embassy in Manila and The Asia Foundation, through its Coalitions for Change (CfC) program, began an initiative back in 2012 to more closely link public infrastructure investment with local economic priorities. CfC has partnered with local business associations and provincial governments in 15 provinces in Western and Central Visayas and Northeastern Mindanao to help them coordinate on priority infrastructure investments based on key local economic drivers. Since then, the program has leveraged a total of $1.9 billion to fund 298 roads and infrastructure projects identified by local business associations in partnership with provincial governments to improve access and stimulate economic activities and development in partner provinces and regions.
In a major win for all the partners on this initiative, on Nov. 21, 2017, the Department of Interior and Local Government (DILG) issued revisions to the guidelines of the Local Road Network Development Plan (LRNDP) that encourage locally driven decision-making and priorities. The key areas of reform are:
- Promoting local road connectivity. The reform allows inclusion of an all road network within the provinces, regardless of its administrative classification.
- Using standard geospatial information. Through the Memorandum of Agreement between DILG and the National Mapping and Resource Information Authority (NAMRIA), which CfC also facilitated, local governments now have standard and national grade geospatial information which can be used in road investment planning.
- Prioritizing key economic drivers. The reform aligns road identification and prioritization on economic-based criteria and anchors priority projects on the key economic drivers of the province and region ensuring local development responsiveness.
- Encouraging strong participation of business associations. With the unique and entrepreneurial perspective of business associations, their participation in infrastructure investment planning is strongly recommended. One of the criteria as well in road prioritization is their endorsement.
- Providing reference for all road funding facilities. The revised plan will serve as a reference material to all funding facilities for roads regardless of administrative classification.
Now that the move for a federal form of government is being fast-tracked, focus and attention on local development should not be neglected. These new reforms are a major step forward in ensuring that this doesn’t happen.
King Francis Ocampo is program coordinator for The Asia Foundation’s Coalitions for Change program in the Philippines. The views and opinions expressed here are those of the author and not those of The Asia Foundation or its funders.