The secretary of the National Economic and Development Authority admitted that the construction industry has not yet fully recovered since the COVID-19 pandemic, hoping that 2025 will be a better year to attain the 2019 numbers.
“Construction has not yet fully recovered since the COVID-19 pandemic struck with the share of private construction declining relative to public construction. We need to substantially improve the investment climate for the private sector,” said NEDA Secretary Arsenio Balisacan in his presentation during the Build Better More Infrastructure Forum in New Clark City, Tarlac on Friday.
Balisacan said the lag is attributable to several factors.
“First, we expected some investor hesitation owing to initial policy uncertainty brought about by the elections in 2022. On the other hand, lingering and persistent inflation, and a challenging external environment, particularly a strong dollar in the past two years, led to the elevated interest rates we see today,” he said.
To avert this, he said the government is not resting to invite and look for foreign investments in the infrastructure, although some aired their hesitancy in being a player in the construction industry here due to high energy costs and ease of doing business.
“But with public investments coming in strongly, that will be the signal for the private sector to come in too, especially that regional and global community investment climate is improving, notwithstanding these geopolitical tensions, because that’s another factor that can matter. But I think we are there. By 2025, we can say that the industry has already pulled out,” according to Balisacan.
He said that under the Marcos Administration’s Build Better More Program, it continues to evaluate, approve, and roll out the 185 Infrastructure Flagship Projects (IFP) now worth P9.54 trillion ($163 B).
Official Development Assistance makes up the majority of IFP fund sources with a 57.5 percent share of total cost.
Public-Private Partnerships (PPPs) will also be a key source of financing to augment spending under the General Appropriations Act (GAA).
“The government is ramping up efforts to ensure that we expedite the approval and implementations of IFPs,” Balisacan said.
Last 30 April 2024, President Marcos issued Executive Order No. 59 to streamline the government's permitting process for IFPs to expedite their implementation.
EO No. 59 aims to ensure that no unnecessary delays will occur in issuing licenses, clearances, permits, certifications, or authorizations needed to approve and implement IFPs.
Meanwhile, Balisacan said public-private partnerships (PPPs) remain a key driver for sustained spending on physical and social infrastructure to boost productivity and raise the country's competitiveness.
A total of 205 infrastructure projects are under implementation with a total amount of P3.559 trillion, while 143 projects are in the pipeline, with a projected cost of P3.095 trillion.
“With the passage of the Public-Private Partnership Code, we have established a stable and predictable environment for collaboration between the public and private sectors,” Balisacan said.