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DPWH is in good hands

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CHANGING WORLD

By DR. BERNARDO M. VILLEGAS

(Part 2)

Dr. Bernardo M. Villegas

Dr. Bernardo M. Villegas

In what he termed the “Golden Age of Infrastructure,” Secretary Mark Villar projected national spending on infrastructures to grow from P1,068 billion (6.1% of GDP) in 2018 to P1,840 billion (7.3% of GDP) at the end of the term of President Duterte in 2022.  In 2018, the total budget of DPWH amounted to P650.87 billion.  In 2017, the first full year of the Duterte administration, DPWH received a total of P675.0 billion allotment.  It obligated P621.9 billion, which is equivalent to 92.1% obligation rate.  The obligated P621.9 billion is 46.1% of P196.1 billion (US$ 3.81 billion) higher than what was obligated in 2016 for the same period.  The DPWH exceeded its targeted obligation rate of 85% based on its FY 2017 Financial Plan and the five-year average obligation rate of 80.2% from 2012 to 2016.  Actual disbursement also increased significantly by 21.8% or P71.5 billion (US$ 1.41 billion), from P332.8 billion (US$ 6.46 billion) to P405.3 billion (U$7.87 billion) in 2017 for the same period.

The DPWH is helping other agencies of the executive branch to effectively spend their respective budgets.  Out of the total P675.0-billion allotment received by DPWH in 2017, 17.1% or P115.5 billion (US$2.24 billion) were appropriations from the Department of Education, Sugar Regulatory Administration and Department of Agriculture that were transferred to DPWH.  The DPWH was still able to disburse a large portion of allotments despite the fact that out of the P115.5-billion (US42.24-billion) allotments from other agencies, 84.2% or P97.2 billion (US$1.89 billion) was transferred to it only in the last quarter of 2017.

Its disbursement effectiveness was also high in the first three quarters of 2018.  As of October, 2018 the DPWH received a total of P735.29 billion (US $14.28 billion) allotment and obligated P609.68 billion (US$11.84 billion) which is equivalent to 82.9% obligation rate.   The obligated P609.68 billion (US $11.84 billion) is 38.9% or P170.73 billion (US$3.32 billion) higher than what was obligated in 2017 for the same period. Furthermore, the disbursement increased by 63.8% or P194.30 billion (US $3.77 billion) from P304.63 billion (US$ 5.92 billion) in 2017 to P498.93 billion (US$ 9.69 billion) in 2018 for the same period.

True to its focus on countryside development, the DPWH leadership gave a lot of importance to the construction and improvement of bridges all over the country.  Since the beginning of the Duterte administration, DPWH has widened a total of 23,928 linear meters of bridges; replaced a total of 8,304 linear meters of existing bridges; constructed 6,199 linear meters of new bridges; rehabilitated 40,191 linear meters of existing bridges; and strengthened/retrofitted 29,259 linear meters of permanent bridges.  As regards roads, especially in the countryside, also from July 2016 to June 2018, DPWH widened a total of 1,896.29 kilometers; constructed 327.74 kilometers of by-passes or diversion roads; addressed 392.81 kilometers of missing gaps; and synergized with other departments by building access roads leading to airports, seaports, and declared tourism destinations, totaling 1,311.91 kilometers.  Of special note is the Tourism Road Infrastructure Program which is aligned with the strategic direction of the National Tourism Development Plan which aims to improve access and connectivity to tourism gateways, service centers, and tourism sites.  The total budget allocated for this program during 2016 to 2018 was P65.77 billion   which would be spent for the rehabilitation and upgrading of about 2,721 kilometers of roads leading to declared destinations.

In line with the increasing role of manufacturing in the industrialization of the economy (manufacturing has been growing faster than services during the last two years), DPWH is also ensuring that road infrastructures connecting the industries and trade will further facilitate balanced development, especially the dispersal of industries away from urban areas towards the countryside.  A total of 2,790 kilometers of roads were identified supporting industry and trade development.  As of 2018, P12.55 billion (US$ 243.69 million) had been appropriated for the construction and upgrading of about 438 kilometers access roads leading to industry and trade corridors.  Especially targeted by these access roads are the priority industries of the Department of Trade and Industry, such as electronic manufacturing services (auto electronics, medical devices, telecommunication equipment, power storage, civil aviation/aerospace, and semiconductor manufacturing service:  IC design), automotive parts, aerospace parts, chemicals, shipbuilding, furniture and garments, tool and die and food manufacturing.

Given these accomplishments in the short period of two years, we can rest assured that the DPWH will be  one of the effective channels for the “Build, Build, Build” program of the Duterte administration that, given the experiences of our East Asian neighbors when they were at similar stages of infrastructure development,  can closely collaborate with the private sector to enable the Philippine economy to attain GDP growth rates of 8 to 10 percent in the next ten to 20 years.   Despite the ongoing controversy about the so-called reenacted budget, given the momentum already attained by the DPWH over the last two years, together with the continuing bullish environment in the real estate sector, I am confident that in 2019, we will see  a GDP growth rate of 7 to 8 percent as many of the construction projects planned over the last two years will be implemented in 2019.

For comments, my email address is bernardo.villegas@uap.ph.

 

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