Considering how COVID-19 has affected the global economy, and how it has practically suspended tourism and business travel until who knows when, does it still make sense for the Philippines to invest in new international airports now, to serve Metro Manila and its neighboring provinces?
One can argue that government money can perhaps go to better use if a bigger chunk is directed towards improvements in public health and education services, as well as creating job opportunities for millions of workers displaced by COVID-19. But, I believe, it is also time to encourage and support the private sector to help out in a bigger way on infrastructure projects like airports and tollways and telecommunication facilities.
In this line, and noting how spending on public works can also help grow a stumbling economy, I am actually in favor of building a new international airport complex in Bulacan; to rehabilitating the existing international airport complex in Pasay and Parañaque cities; to putting up a new international terminal and runway at Sangley Point in Cavite; and, to reopening the shipyard in Subic Bay, Zambales, among others.
I support the proposal to make new toll roads, including one that will run parallel to the Pasig River, as well as extending the existing tollways to the Ilocos Region to the north and the Bicol Region to the south. In addition, I support the proposal to build a new telecommunication backbone and more hospitals. But, more than anything, we should all support efforts to improve the local production of food and potable water.
Commuter railways, and also for cargo, going north and south, and subways in Metro Manila are all part of the long list of desired facilities. And, many of these appear to be in the present pipeline of projects. Frankly, I am not very concerned with who will build them or which foreign government is extending assistance. I am more concerned with whether or not any of these projects will actually get done.
In our experience, economic and development planning — and the political will to execute projects — come in cycles. Since 1986, these are cycles of six years — or one cycle for every presidential term. While there may have been references to the government’s Medium-Term Development Plan, it would seem we have had only relative success in pursuing long-term projects or those with long gestation periods.
Some big proposals stay only in the planning stage. A few don’t go beyond lip service and storyboards. For example, we had planned on an integrated steel mill as early as the 1950s, and had some relative success when National Steel Corp. was put up. But this government corporation has since been sold to the private sector, and to date, I am unsure if any integrated steel mill — one that actually makes steel rather than just rolling them — is actually operating in the country.
We built a nuclear plant in the 1970s but have since abandoned it. It was built, but never used, and yet we still agreed to pay the foreign loans related to its construction. We ran a railway from Damortis, La Union all the way to the Legaspi, Albay up until the 1970s. To date, through the rehabilitation of the rail system in parts, we have had a running commuter service within Metro Manila and to some parts of Laguna. But, we have yet to restore the rail line to its former glory. And, we have not managed to get cargo moving on rail.
We have run an international airport within Metro Manila since after World War 2, and now operate four terminals. But we have not gone beyond two runways. Up until the start of the COVID-19 pandemic, our international airport was almost always congested because of runway limitations. The same can be said of our commuter light rail system in the metropolis, which we have expanded to only three running lines in 36 years or since LRT-1 started in 1984.
The efficient movement of people and goods is essential to any economy seeking to grow. Inefficiencies in these movements, or bottlenecks, are enough to stifle growth and to hold back an economy from operating at capacity and reaching full potential. Now that the economy has stumbled, and is grappling with recovery, it needs a strong push in the right direction. Investing in infrastructure can help in this regard.
Investing in worthwhile projects now is bound to produce better returns for investors in the long term, rather than letting cash sit in banks. Even the stock market is not producing attractive returns. The property market remains attractive for those with the funds to invest, but investors have become more particular about purchases. Everybody is looking for a bargain. Where else can one invest money now that can promise a relatively good return?
And while more private money appears to be heading to financial technology, software development, and technology-related services, I still see value in putting cash in hard infrastructure related to power, water, transportation, food and water production, telecommunication, and delivery of health and education services. Housing demand will have to make up for the drop in retail and commercial property development.
I believe the COVID-19 global pandemic to be temporary, and that the global economy will eventually recover from it. In short, while things may not go back to exactly the way they were, for sure, the global economy will eventually be back in business. And when that happens, our investments in public infrastructure will start to make more sense — and perhaps bear fruit.
When the world reopens, even in the era of electric transportation, we will still need roads and rails. Smaller planes, and short-distance travels by air or sea, will still need ports for business travel and tourism. Exports and imports will be restored and will require facilities for storage and transportation. And, even without a pandemic, people will still get sick and need hospitals and other similar medical facilities.
Many of the proposed or planned projects now will take more than two years to complete. To start on them now will give us an advantage as the world economy begins to recover. Early preparation is a key element of success. And while the threat of disruption remains not only because of the pandemic but because of geopolitics and international trade issues, these too will eventually pass. Life will go on.
The more crucial part is ensuring the continuity of long-term plans and programs, and assuring investors and proponents that government planning and execution now, and its imprimatur, will go beyond the remaining years of the Duterte Administration. We cannot risk all these efforts being overturned by a succeeding administration, for one reason or the other. We have had enough economic hiccups since 1945. By this time, we should have already learned the hard lessons of the last 75 years.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council
