The Philippines is moving ahead with a huge infrastructure development program, which is aiming to dramatically improve the country’s airports, seaports, railways, subways, roads and bridges.
The ambitious initiative includes a US$180 billion investment on 75 “big ticket” infrastructure projects across the 7641-island nation of 106 million people.
If successful, the building program will see the Philippines’ Gross Domestic Product (GDP) increase to 7.4% by 2022, according to the government, which is halfway through a six-year term.
With a 6.6% growth forecast this year by the International Monetary Fund, the Philippines is currently the best performing among ASEAN’s five largest economies, ahead of Singapore, Thailand, Malaysia, and Indonesia.
China has already pledged about US$24 billion in loans and investments for the country’s grand infrastructure plan. Japan remains the Philippines’ top investor, meanwhile, accounting for nearly US$6 billion (41%) of the country’s official development assistance (ODA) in 2018.
Japan-backed projects that have already broken ground include two new railways aimed at easing the capital’s chronic traffic congestion: the North-South Commuter Railway (NSCR) and the Metro Manila Subway.
The NSCR, a 37.6km elevated electrified line connecting Manila with Malolos City, is expected to carry 300,000 passengers daily. The US$7 billion Subway, also the country’s first underground mass transit system, will transport 1.5 million passengers per day, although it won’t be completed until 2025.
Both projects are a high priority for Manila, considering the city’s traffic problem costs the economy US$45 million per day, according to the Japan International Cooperation Agency (JICA). Road traffic was also partly responsible for the spate of severe port congestion experienced in Manila in 2014. The port still experiences seasonal congestion, but much of the landside traffic and terminal access issues were alleviated by increased terminal capacity and the implementation of a new vehicle booking system.
According to Fitch Solutions, the Philippines government’s Build, Build, Build (BBB) program includes 39 major road projects with an estimated value of US$21.8 billion, including the Cavite-Laguna Expressway and the Harbour Link Project.
New and improved maritime infrastructure will be vital in lowering the Philippines’ high logistics costs, registered as 27% of manufacturers’ cost of goods in a recent World Bank study. Nationwide port volumes grew 7.5% to 7.53 million TEU in 2018, reflecting the recent strong trade growth.
Port capacity has been extended in Manila, the country’s major maritime gateway, and at the nearby Port of Batangas, where the DP World-operated Batangas Container Terminal inaugurated its second berth in April. New port projects under BBB include the South Korea-funded, US$172 million Cebu International Container Port, and the Davao Sasa Port Modernisation Project.
The country’s airports are getting an overhaul, too. There is a US$6.7 billion plan to modernise Manila Ninoy Aquino International Airport, as well as the proposed US$13.8 billion Manila Bay Airport, 27km north of the capital.