DUTERTENOMICS’ BUILD BUILD BUILD PROGRAM
INTRODUCTION “IS IT THE ROAD TO THE PROGRESS?”
In the past administrations, Philippines has experienced dramatic acceleration in infrastructure
spending. This might happened because of ‘Teka-Teka’ behavior (wherein it takes time to take
effect the infrastructure project) and underspending issues faced by the government, most
especially during the term of former Presidents Gloria Macapagal-Arroyo and Benigno Aquino
III.
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In addition to that, under the leadership of President Rodrigo Roa Duterte, the Southeast Asian
archipelago is undergoing an infrastructure boom not recognized since the time of the late
President Ferdinand Marcos, in which the portion of the infrastructure spending in the Gross
Domestic Product (GDP) during 2017 has increased to 5.4%. In order to resolve the problems
encountered by the previous regime, the National Government, in coordination with National
Economic Development Authority (NEDA), Department of Public Works & Highways (DPWH),
Department of Transportation (DOTr) andBases Conversion & Development Authority (BCDA),
proposed a reform regarding the abovementioned problems which is the ‘Build Build Build
Program’. The said program focuses on establishing 75 flagship projects, which include six
airports, nine railways, three bus rapid transits, 32 roads and bridges, and four seaports, with
an expected spending of $ 180-billion. It was considered as the “Golden Age of Infrastructure”
under Duterte’s governance.
PROS In relation with this agenda, this can be beneficial:
(1) improve rural incomes, (2) decrease cost of production and encourage countryside investments,
(3) make the movement of goods and people to be more efficient, (4) lessen borrowings from
different financial institutions, and (5) create job opportunities.
Improve Rural Incomes
Referring to Duterte’s infrastructure plan, there will be a ten water resource projects as well as
improvement in the irrigation system that will support the agricultural outputs in the whole
country. In regards to that, the increase in productivity and raise in
income are expected to happen and benefited by the farmers in rural areas.
Decrease Cost of Production and Encourage Countryside Investments
The ‘Build Build Build Program’ aims to decrease the production cost and convince the potential
investors to conduct business with out country. Through this project, we will be given an
opportunity to encourage them to invest highly modernized machineries and innovations that will
truly help the Philippine government to execute the plan. As a result of this negotiation, the
production cost that will be incurred during the process of the infrastructure system will
be diminished since the properties supplied by these investors will play a significant role in
achieving our goal.
Make the Movement of Goods and People to be More Efficient
Under this program, the newly-built roads and bridges connecting
from rural to urban areas will make the transfer of outputs convenient and efficient. Furthermore,
the transactions between firms and households will be conducive.
Lessen Borrowings from Different Financial Institutions
Under the new tax reform package of the government, so-called Tax Reform for Acceleration and
Inclusion or TRAIN Law, the taxes received by the government would be generate a lot of revenue
to help finance the aforementioned program and improve the capacity of the government to reduce
borrowings for the development of economy.
Create Job Opportunities
Lowering unemployment rate is one of the targeted goals of the administration. Thus, ‘Build
Build Build Program’ offers various job opportunities to cure the aforementioned issue.
Several construction companies will be needed a lot of workers to make the project feasible.
This project will be a stepping stone to the progress of the economy, as well as in increase of
income of every individuals.
CONS
On the other hand, the said program has its negative impacts, not
only on the individual aspects, but also in the economy as a whole. The disadvantages
emphasize (1) economic risks(i.e., inflation), (2) interest rate issues, (3) contractor risk, and (4)
unavoidable scenarios that will most likely to happen
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Economic Risks
The expected production cost from the time the plan was executed
will be adjusted to the current prices if the country will experience
rising inflation rate. Moreover, this scenario could lead to the rearrangement of country’s
priorities. It actually means that the
attention of the government will be moved to other aspects like education, national defense
and interest payments.
Interest Rate Issues
As the government has insufficient fund in constructing the projects, they will tend to borrow
long-term investments from the foreign countries that will be a big part of the national
budget, hence, the latter will impose higher interest rates as a major consequence in the near
future.
Contractor Risk
The wrong choiceof contracting parties will result in a failure of performing the original
objectives and incur higher cost. Corruption may be one of the cause of the poor
implementation of projects because of its contractor failure. This could also happen whether
the source of budget is the national budget itself or some private contracts (public-private
partnership).
Unavoidable Scenarios that will Most Likely to Happen
Failure to identify the real problem during the recognition stage will make the program less
effective. Like for example, there’s an instance that the roads which are well-constructed will
be destroyed as part of the infrastructure projects in the locality. The program must enter
into legislation wherein the contract will be executed from the Congress and Senate to be
approved by the President. Despite of this fact, the President Duterte’s action plan to answer
the case of economic development has a negative implication as itdid not follow the due process.
Reaction:
After gathering all the facts regarding the positive and negative impacts of ‘Build Build Build
Program’, it is favorable to implement this Pres. Duterte’s infrastructure plan. The rapid
increase in the country’s Gross Domestic Product (GDP), the avoidance of underspending as well
as in infrastructure projects and the high demand for employment are the expected outcomes
of the said project once it will be implemented. Overall, the major concern of the administration
focuses on the Philippines’ economic development.
Every country’s GDP using expenditure approach is computed by adding the household
consumption, investments, government expenditures and net exports . The idea of so-called
‘golden age of infrastructure’ is to enrich these components, most especially investments and
government expenditures, because as observed in the administration of Pres. Benigno Aquino
III in his first year of presidency (2010), the percentage of infrastructure spending as
indicated in the GDP. The objective of the recent administration is to drive up the GDP before
his term ceased.
During the last two years of Pres. Aquino’s term, the projects for that particular years
were not been performed. As pertaining to the essence of the scheme, this aftermath must
be prevented and the proposed blueprint of the government will not remain “drawing” until the
end of Duterte’s leadership.
The Philippines suffers from unemployment and poverty because of poor
infrastructure. Considering the intention of aforesaid proposition, there will be a high
potentiality that the unemployed Filipino citizens will be given a chance to grab job
opportunities which eventually result to GDP increase in household consumption category
and will lead to a major decrease in
the current unemployment rate.