A news article in The Philippine Star 23 July 2013 edition noted that the Philippines Government plans to increase infrastructure expenditure to 5% of GDP before President Aquino steps down in 2016, lifting expenditure off a relatively low percentage of GDP base.
As featured in our blog post on population projections through to 2050, the Philippines is expected to be the 10th most populous country in the world by 2050.
From an infrastructure asset management professional’s perspective, President Aquino’s proposal to increase investment in infrastructure is logical and necessary considering the population growth occurring, and the economic growth desired by the Philippine Government.
When compared with other planned infrastructure expenditure in the East Asia and Pacific Region being 7.2% of GDP, it can be seen that it is likely the Philippines Government will continue to lift infrastructure expenditure for the foreseeable future to keep up with the expected growth, economic drivers, and competition from other countries in the region.
Two sides of Infrastructure Management can be considered – these sides being revenue and expenditure.
With the Philippine Government moving to provide the revenue for the infrastructure, the real challenges will be in making sure the expenditure delivers the right infrastructure, built to the appropriate standards in the right places.
This large increase in the available budget and expenditure for infrastructure (planned to more than double current levels of budget) in a short time period has potential to create multiple challenges:
- Will there be enough suitably experienced Engineers to design and supervise the infrastructure?
- Are current standards suitable for such an extensive program of new infrastructure – should these be revisited?
- Have the latest earthquake and tsunami engineering lessons (from Japan, New Zealand, and the Philippines) been incorporated into the infrastructure engineering design standards?
- Can the construction industry scale to build this new infrastructure – does it have enough experienced staff, the right methods, and the right quality standards for an extensive new infrastructure program?
- Is there agreement on what infrastructure is needed and where – will this be driven by national, or province economic analysis and drivers or by mere political considerations?
- Will the new infrastructure be designed and built using the whole of life cost and maintainability analysis – to optimize the cost and standard of services delivered across the whole life of the asset?
- The Philippines is experiencing massive growth in population – how will this level of growth be factored into the infrastructure design and provision, when the parameters are changing so fast.
Clearly, the Philippines has a range of exciting and very interesting challenges ahead as it plans this next phase of its national infrastructure development.
The challenges listed above apply to any country that is rapidly increasing its infrastructure expenditure and construction levels.
The use of infrastructure asset management techniques will assist in this planning and ensure the new infrastructure provision is fit for purpose and providing the services required in a period of high growth.
PHOTO CREDIT: Karl Hipolito