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Improving Infrastructure in the Philippines

As President Rodrigo R. Duterte refocuses on constructing the infrastructure of the country, a list of 75 Flagship Projects has been released. These projects are identified by the National Economic Development Authority (NEDA) Board Committee on Infrastructure and the Investment Coordination Committee. Of the 75 Flagship Projects, 53 have disclosed their approved budgets. Projects include projects by the Department of Transportation (DOTr), the Department of Public Works and Highways (DPWH), and the Philippines Bases Conversion and Development Authority (BCDA).

Infrastructure in the Philippines

Despite being an island nation with roughly 110 million people, the Philippines has a severely lacking infrastructure. The country ranks 92 out of 140 countries according to the World Economic Forum, and its infrastructure has long been plagued by a lack of vitality. A recent report by the World Bank found that the country’s infrastructure is a cause for concern. The incoming president, the son of a former dictator, is committed to improving infrastructure in the Philippines.

Need for more foreign companies

In the past, the Philippine government has emphasized the need for more foreign companies to be involved in building and maintaining the nation’s critical infrastructure. These sectors have a high potential for growth as the country is home to a number of thriving industries, including construction, infrastructure development, and real estate. The government is encouraging foreign direct investment in these sectors by making it easy for foreign companies to become local contractors and acquire construction permits. Foreign investors should also consider the booming Philippine real estate market.

Capacity of the private sector to finance infrastructure

While government guarantees provide a useful interim measure, the private sector is not always able to provide long-term fixed-rate financing for infrastructure Philippines projects. These guarantees can come in the form of debt guarantee, interest rate guarantee, construction cost guarantee, and tax credit. The government should explore the use of these guarantees to help mobilize the private sector to finance and deliver infrastructure. Several ways are possible, including securing external guarantees.

Impacts of climate change on infrastructure

The Philippines has been a relatively minor contributor to climate change, although it is on the rise. Currently, it ranks in the top 25 of countries with low greenhouse gas emissions. However, its emissions are projected to double by 2030, with the transport sector accounting for almost half of all these emissions. Climate change impacts are not only bad news for the environment, but they will have a significant economic impact, too. Here’s a closer look at the impacts of climate change in the Philippines.

Need for more professional services

While the Philippines’ economic growth has been steady since the 2000s, the country is still lagging behind its more affluent neighbors in terms of quality infrastructure. Government red tape, regulatory uncertainty, a slow judicial system, and corruption continue to be major problems for investors. But if the country is to catch up to its peers, it will need to invest more in professional services to make it happen.

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