Description:
Infrastructure needs in the Philippines
must be addressed to ensure long term economic growth. After
several years of fiscal pressure, the Philippines is now in
a position to address these needs. Despite the current
international financial situation, the country is now in a
position to commit resources to improve transport
infrastructure. To this effect, it is necessary to: i) make
resource allocation more effective; and ii) improve
governance in the coordinating departments and in
implementation agencies. The suggested actions that follow
address these two fundamental needs within four groups of
recommendations. First, focus should be on improving
infrastructure quality and service delivery. While the
quantity of transport infrastructure in the Philippines in
network and facility density compares well with other
countries in the region, its capacity and quality does not.
Some critical transport costs are higher in the Philippines
than in its neighboring and competing countries. Second, the
processes for allocating public resources could be improved.
With additional public resources available, project
preparation, planning and budget processes need to ensure
that expenditures are well focused on areas that offer the
best value for money in improving service quality. The
government has taken important initiatives to achieve this
end. But much remains to be done. The quality of multiyear
planning and the quality of project preparation and
selection in the annual budgetary process could be improved.
Third, higher public spending on transport infrastructure
will be effective only if accompanied by a program to
confront institutional and policy distortions. In national
budgeting and planning processes, this means improving the
quality of planning documents and project appraisal and
strengthening of prioritization in the national planning.
Fourth, the private sector could be encouraged to continue
its important role in transport infrastructure investment.
Public resources alone will not meet the financing needs. In
the mid-1990s the Philippines experienced a rich supply of
proposals for private finance, mostly unsolicited. Often
poorly coordinated with other facilities, these initiatives
met with mixed success.