Philippine Transport Forum - Takehiko Nakao | Asian Development Bank

Philippine Transport Forum - Takehiko Nakao

Speech | 3 July 2017

Remarks by ADB President Takehiko Nakao at the Philippine Transport Forum 2017 on 3 July 2017 at ADB Headquarters, Manila Philippines

Importance of Infrastructure

  • The Philippines has made serious efforts recently to build infrastructure in transport, energy, airports, water and urban facilities. But, infrastructure is still identified as one of the most significant constraints to the Philippines’ growth prospects.
  • While the country has improved consistently in the Global Competitiveness Ranking from 65th in 2012–2013 to 57th in 2016–2017, its overall infrastructure significantly lags behind other emerging Southeast Asian countries. In 2016–2017, the World Economic Forum Global Competitive Index had the Philippines ranked 95th out of 138 countries in terms of infrastructure quality, well below other Southeast Asian countries, such as Malaysia (24th), Thailand (49th), and Indonesia (60th).
  • Infrastructure is one of the basic conditions for economic development. A well-developed transport network is an essential requirement for investors, both domestic and foreign, as an underdeveloped transport infrastructure leads to high costs of doing business, and undermines business potential and economic growth.
  • Manila congestion is estimated to cost Php2.4 billion per day. It also affects the well-being of people. Good quality, cleaner transport enables millions of people to have better and faster access to work, markets, education, healthcare, and other services. This will also help to clean the air
  • We must recall that Manila used to have an extensive tram system and the Philippine National Railway served much of Luzon. Unfortunately, these systems either disappeared or deteriorated due to lack of investment after motorization started. We must reinvest in such sustainable, clean and green transport solutions.
  • One recent progress in Manila transport is the NAIA expressway, which has been built using public-private partnership (PPP). Those of us who use the airport on a regular basis have already recognized the great benefits of this project. From my personal experience, the travel time from the airport to my apartment in the Bonifacio Global City was very unpredictable and usually very long. On one Friday evening it took me over 3 hours. Now I can safely expect that the travel time is less than 45 minutes. This is a clear example of the difference that infrastructure investments can make.

The Government initiative and the Build Build Build program

  • Significant catch-up in infrastructure development is needed in the Philippines to realize the country’s potential and increase competitiveness amongst its regional neighbors.
  • After President Rodrigo Duterte was elected, the Government has announced the 10-point Socioeconomic Agenda, and initiated the Build Build Build program to dramatically improve the nation’s infrastructure. The scale of investment is very large. The total Build Build Build program will allocate Php1.7 trillion ($35 billion) between 2018 and 2022. Each year’s spending equals around 2.5% of annual GDP.
  • To do this, good coordination and efficient institutional structures are required for successful delivery of large scale programs. Clear lines of responsibility and a systematic approach to reconcile differences among authorities are essential. The Philippines PPP center, which ADB helped to establish, is a good example of how a central body can address a range of coordination problems. It is worth considering a similar cross-cutting entity for the Build Build Build program.

The role of ADB

  • ADB has a long history in the Philippines, our host country for 50 years. We have provided assistance using both our sovereign and private sector financing. In the area of transport, we have supported such large infrastructure projects as the North Luzon Expressway expansion as well as rural roads to connect farms to markets in Mindanao and other parts of the country.
  • To support the Philippines in delivering “the golden age of infrastructure”, ADB has committed to work with the Government in three areas: (i) financial support, (ii) technical assistance; and (iii) advisory and knowledge sharing.
  • ADB has proposed a pipeline of projects amounting to $4.2 billion from 2018 to 2020 to assist the Philippines in transport, energy, education, social protection and rural development. Transport is a major focus of our support.
  • Regarding technical assistance (TA), I am pleased to announce that ADB is preparing a TA loan of $100 million, the Infrastructure Preparation and Innovation Facility, or IPIF. This TA loan will provide expertise and knowledge to key line agencies such as the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) . It will help the development and preparation of projects, covering project feasibility studies, design, and procurement. This Facility will fast track priority projects and move them forward for delivery under this Administration.
  • In addition, ADB will provide a $5 million TA grant for Strengthening Infrastructure Capacity and Innovation for Inclusive Growth. This TA will develop a project management and information system which will assist oversight agencies monitor the progress of projects, identify bottlenecks and deliver solutions.
  • We are also promoting PPP in the Philippines. Our PPP Office is advising on the North-South Rail improvements and the Clark Green City.
  • One of ADB’s priorities is to improve traffic along EDSA (Epifanio de los Santos Avenue), perhaps the most important transport route in Metro Manila. ADB will support the Government deliver an integrated transport solution for EDSA, catering for all road users, and helping commuters to travel more efficiently. Improvements to mass transit and buses are required. Traffic management should be improved. Connections between EDSA to the surrounding areas such as Ortigas and Makati should provide smooth access to and from EDSA.

The Philippine Transport Forum

  • This Forum is one example of ADB’s advisory and knowledge sharing activities. This also represents ADB’s convening function.
  • I believe this Forum will provide an opportunity to share international best practices, and to help strengthen partnership among officials within and between government agencies for successful delivery of key infrastructure projects.
  • ADB is committed to supporting the Philippines in delivering key infrastructure projects. We need to show results and act to deliver.