The Build, Build, Build, which is the government’s infrastructure program, will help restimulate the economy and bring back jobs, as the country moves towards recovering from the economic impact of the coronavirus disease 2019 (COVID-19) pandemic crisis.
Karl Kendrick Chua, socioeconomic planning secretary, said during the virtual Philippines’ Economic Briefing hosted by the Sumitomo Mitsui Banking Corp. yesterday the infrastructure program has been a major growth driver and will be crucial in our economic recovery.
Chua’s presentation shows that infrastructure disbursements as a percentage of gross domestic product (GDP) is estimated to be 5.6 percent and 6.2 percent in the first quarter and second quarter of 2021, respectively, from 4.8 percent in 2020.
In 2019, or pre-pandemic, the level of infrastructure disbursements was at 5.4 percent of GDP.
“The infrastructure disbursement or spending have reached historic highs in this administration and are getting back on track. Our spending has slowed somewhat in 2020 as a percent of our GDP but we are programmed to further increase this in the coming quarters. Our infrastructure and capital outlay also is showing a very good recovery in 2021,” Chua said.
“The recovery of infrastructure has actually helped restore millions of jobs. In the latest labor force survey, some 4.3 million jobs were recorded in construction, and this is one of the reasons for the strong job creation, despite the pandemic,” he added.
Chua said one to two percentage points of Philippine economic growth has been driven by infrastructure prior to the pandemic.
“In the second quarter of 2021, we achieved one of the highest contributions of infrastructure to grow at 5.6 percentage points. One of the key drivers of our economy and job creation has been infrastructure, given the strong multiplier effects. Construction has a multiplier effect of 2.3 for output, and 3.9 for employment,” Chua said.
“Together with the continuous roll-out of our vaccination program, infrastructure will be key in driving economic recovery, restoring confidence and bringing back jobs,” he added.
Meanwhile, in the same event, Trade Secretary Ramon Lopez said the Philippines is Japan’s ideal gateway within the Asean, being strategically located in the region and offering preferential trade arrangements.
He said there is a wide scope of business opportunities for prospective and existing Japanese investors, particularly in manufacturing (electronics and semiconductor, medical devices, and agribusiness), construction, services and renewable energy, among others.
Lopez said there are many opportunities for both existing and prospective Japanese firms to seriously consider.
“ Japanese firms that are already operating in the country such as Ajinomoto, Epson and Murata may explore sourcing out their energy requirements from Renewable Energy Suppliers under the Green Energy Option Program (GEOP) of the DOE or establish RE Project for own-use under Republic Act No. 9513. They may even sell their excess capacity to other users under the Net Metering Program,” he said.
He said there are areas of opportunity for Japanese investments in logistics, smart manufacturing, electronics design services and Internet of Things.
He addedJapan and the Philippines also complement on several areas of manufacturing industry for healthcare products such as personal protective equipment, medical devices, and pharmaceutical products which are important during this pandemic era. Other preferred areas are in the manufacture of auto and auto parts, construction materials, electronics, chemicals, shipbuilding, and aerospace parts. – Angela Celis and Irma Isip
