An announcement
made by the Department of Finance (DOF) emphasised on the significance of
urgent development of transport infrastructures to boost economic expansion,
increase income and improve cross-border connectivity.
DOF Secretary Carlos Dominguez III has
emphasised the urgency of modernising transport infrastructure systems in
Asia’s emerging economies in order to boost economic expansion and increase
incomes.
Moreover, it will improve cross-border
connectivity to accelerate efforts in building a common market in the region.
Sec Dominguez said developing transport
infrastructure is critical especially for the island and archipelagic economic
of Southeast Asia such as the Philippines. The country continues to face
challenges regarding travel and the delivery of goods and services to remote
populations.
Sec Dominguez attended the Asian
Infrastructure Investment Bank (AIIB) Governors’ Business Roundtable
held at the Regal Room of the Trident Hotel, India.
During the discussion, he said, “Transport
infrastructure is clearly our most urgent need. It immediately contributes to
economic expansion and broadens the revenue base of countries. Businesses are
able to improve productivity dramatically and households are able to improve
incomes with the modernisation of transport infrastructure.”
Sec Dominguez added, “To be sure, strategic
infrastructure projects are costly. We are building a strong basis for our infrastructure
program by modernising our revenue systems, pursuing financial sector reforms
intending to broaden participation and strengthening our banking system to
enable capital accumulation.”
Dominguez explained. “But we will rely
heavily on our development partners for strategic financing support.”
He said institutions like the AIIB can
enable shorter tenors for the Philippines’ key projects. Moreover, it can
provide more cost advantages compared to commercial funding sources by ensuring
longer maturity and more favourable financing terms.
The Duterte administration plans to
increase infrastructure investments from 6.3% of the gross domestic product
(GDP) in 2018 to 7.3% by 2022 through its 75 flagship projects.
“It will greatly benefit emerging economies
such as ours if our development partners are able to include a grant element of
25% and superior access to knowledge, experience, and technology,” Sec Dominguez
said.
He also said that recipient economies
expect development institutions like the AIIB to help them obtain the best
advantage by expediting the processing of financing packages without
compromising the quality of project preparation and implementation.
He added, “We look to the AIIB for more
immediate and longer-term financing that will guarantee the success of our
infrastructure investment program and the strong expansion of our domestic
economies.”
26 infrastructure projects across Asia have
been approved by the AIIB Board of Directors as of 11 April 2018. The bank will
be financing these projects amounting to around US$4.52 billion.
The Metro Manila Flood Management Project
Phase 1 (MMFMP1), is the first project co-financed by AIIB with the World Bank
in the Philippines. This was signed in December 2017 and declared effective on
15 March 2018.
A recent
announcement highlighted the Philippines’ participation in the annual AIIB
Board of Governors Meeting. Sec Dominguez will be representing the country and
will be involved in the discussions in ensuring a sustainable future for Asia
through sound infrastructure investments.
