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Case Study about the Effects of the government's Build,

Build, Build program to the Philippine Economy
Banking and Finance (Polytechnic University of the Philippines)

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EVALUATING THE IMPACT OF

ECON 2013
THE “BUILD, BUILD, BUILD
PROGRAM” TO THE PHILIPPINE Kyla Mauricia S. Gahol
BBF 4-10s
ECONOMY

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Introduction
In the past years, the government has handled numerous complex and large-
scale infrastructure projects and not all have gone well. Because of some incomplete
planning, rushed preparation, and insufficient funding, these big projects are slowed
down or ended poorly. However, as President Rodrigo Duterte, ruled the presidency, he
ramps up the “Build, Build, Build” project as an infrastructure investment. Now,
government agencies are changing the way they do business to make sure projects
happen on time and on budget. The administration commits to boost public spending for
infrastructure from the current 5.1 percent to 7.4 percent of gross domestic product by
end of his term.
The big scenario in the status quo is the effect of the said project to the ever-
changing economy of the Philippines. Primarily now that a big percentage of the budget
will come from the GDP. In addition to this, the government sees infrastructure
development as the solution to job generation, transportation and traffic woes, and high
prices of goods and services. From wherever aspect we look, the Philippine economy is
at stake with this project.

Content
The current administration under the set of the socioeconomic policies,
“Dutertenomics,” the development of infrastructure and industries is one of the major
priorities to be accomplished. Many projects are already approved to be completed
soon following the major projects that ensued the outline of the policy from the
preceding years.
It is a big spring of hope not only for the government to implement such
promising projects but also for the people because it will generate and give many jobs
and source of income to the families. In his own words, Duterte believes it will bring
abundance to the economy of the country. He said in his latest State of the Nation’s
Address, "We will make the next few years the golden age of infrastructure in the
Philippines to enhance our mobility and connectivity, and thereby spur development
growth." To make that happen, the Duterte administration has diversified its funding to
include significant loans from Japan and China along with multilateral lenders like the
Asian Development Bank, World Bank and the new Asian Infrastructure Investment
Bank.

Discussion of Content
Build, Build, Build
This is the program under the Duterte administration designed to modernize the
country’s infrastructure backbone by rolling out 75 flagship projects worth a combined
total of $36 billion in investments. This is in keeping with the government’s goal to
sustain rapid growth, attract investments and attain economic inclusion for all Filipinos.

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Infrastructure, especially those that promote universal public provision of goods

and services, people’s mobility, and a life with dignity are necessary. Government/public
spending under BBB is crucial as past experiences have exposed the weaknesses and
contract anomalies as well as demystified the non-transparent PPP processes and false
promises, all designed to protect corporate. These are fundamentally incompatible with
ensuring universal access to quality public services.

Impact to the Philippine Economy

Investments
The foreign investors and lenders are the biggest gainers on this project. Truth is,
countries that are lending us money are not really doing this out of kindness and
genuine willingness to help. Everything is really shaped by economic and social gains
they can get from the Philippines. Aside from gaining a lot just by the debt’s interest,
they can earn profit by exclusively providing the needed materials and services we need
to build the roads and railways.

Mounting Job Opportunities

Even the Department of Labor and Employment is optimistic that it will spawn
jobs giving more opportunities to everyone giving priority to the people who are
unemployed. Even the Overseas Filipino Workers are envisioned to come home and
work here.
National Economic and Development Authority (NEDA) Chief Ernesto Pernia,
however, clarified the infrastructure boost will add more than 1 million new jobs to the
usual 1 million jobs created per year, resulting in 12 million jobs for the 6 years of the
Duterte administration. Most of the new jobs will be in the field of manufacturing and
construction, including carpenters, welders, plumbers, and electricians.

Downside

In an analysis by a website called Carmudi Insider, there are still shortcomings

due to the implementation of the program.

The government plans to compensate for this by reforming the tax structure,
which will cut the income tax to 25 percent from the current 32 percent. According to
fund manager Wilson Sy, this will allow them to “maintain fiscal responsibility while
increasing infrastructure spending.”

Despite this promise, reforming the taxes can lead to three changes:

 Higher value-added tax (VAT)

 Higher and expanded excise tax on all petroleum products
 Sugar excise tax

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In the end, many Filipinos will still feel the burden of the huge debt incurred by the
government.
Synthesis/Summary
As said before it is a very promising program of the Duterte administration that
we ought to acknowledge and commend. If we partake committedly, and give our
support all the pending projects are set to go smoothly as planned.

From the previous years, the country’s growth has been shallow and far from
comprehensive, leaving high levels of unemployment, poverty and hunger relatively
untouched. And this is where the Dutertenomics’ “build, build, build” agenda comes into
the picture, hoping to bridge the gap in economic policies of past
administrations. Infrastructure is clearly the country’s weakness.

On one hand, infrastructure has been a major source of concern for foreign
investors, who have been discouraged by the country’s weak infrastructure and heavy
utility costs. Those investments are crucial to create well-paying jobs for the millions of
poor and unemployed Filipinos.

Recommendation

As a student, I would like to entrust the decisions to the government. All that the
people have to do is to know more about the project. Reading about the said program
will help us a lot to understand it better. Some will disagree and oppose to the
promotion but some will see it the way the administration did. The lack of openness to
the public is one of the barriers to a great management.

I would recommend that the government includes the citizen more and develop
ways to endorse the program. It will be more organized and beneficial if it is reached out
to everyone especially to those who will be needing the welfares more. If it is known to
the community that the “Build, Build, Build Plan,” will open more job opportunities to
many people and will help our economy grow, they will be more involved and supportive
of the projects.

Conclusion

Supporting the said analysis of the above mentioned website,

President Duterte’s “Build, Build, Build Plan” is an ambitious undertaking, and indeed
has a great potential to make the Philippines a stronger, more developed nation. Still,
the government’s pursuit to achieve a “Golden Age of Infrastructure” can also prove to
be an exceptional burden to the economy and many Filipinos in the long run.

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Bibliography (Website sources)

http://www.build.gov.ph/
https://focusweb.org/content/stories-behind-numbers-dissecting-duterte-s-build-build-
build-program
https://www.adb.org/news/features/making-build-build-build-work-philippines
https://www.forbes.com/sites/outofasia/2018/02/28/dutertes-ambitious-build-build-build-
project-to-transform-the-philippines-could-become-his-legacy/#76b597111a7f
https://www.dof.gov.ph/taxreform/index.php/2018/01/23/build-build-build-roll-75-
projects-worth-35-5-b/

Pictures

“Success Stories”

Philippine's Pedestrian Link Bridge Mandaluyong's Main Drainage NAIA Expressway

The Infastracture Plan

Cover Page of the Build Website Discussion of Dutertenomics Duterte with Some Foreign Investors

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