Transcript Philippines

Philippines: Meeting
Infrastructure Challenges
The World Bank
Infrastructure in the
Philippines

A mixed picture of important achievements

And remaining weaknesses
Overall access to water supply and sanitation,
telephones, and electricity are relatively high
compared with other developing Asian
countries
Country
Power
Telecoms
Water & sanitation
ElectrifiQuality of
Mainlines Mobile subAccess to
cation electric supply per 100 scribers per
improved
rates (%) (Scale 1–7) peoplec 100 peoplec sanitation (%)
2000
2003/04
2003
2003
2002
China
Malaysia
Mongolia
Thailand
Philippines
Vietnam
Sri Lanka
Indonesia
India
Rank
98
96
90
82
80
75
62
53
43
5 of 9
4.2
5.9
—
5.3
3.7
3.4
3.2
3.6
3
5 of 8
20.9
18.16
5.62
10.49
4.12
5.41
4.9
3.94
4.63
8 of 9
21.48
44.2
12.98
39.42
26.95
3.37
7.27
8.74
2.47
3 of 9
44
—
59
99
73
41
91
52
30
3 of 8
Access to
improved
water (%)
2002
77
—
62
85
85
73
78
78
86
2 of 8
Total road network length compares favorably
with neighboring countries
Total road
length
Country
(km)
Indonesia
310,000
Thailand
209,800
Vietnam
204,318
Philippines
202,083
Cambodia
38,257
Malaysia
72,000
Ranking
Road density: length in km per
1,000
vehicles
1,000
sq. km of
(4-wheel) population land area
65.8
1.4
0.16
42
3.3
0.41
302
2.5
0.62
91.3
2.4
0.67
372
2.7
0.21
19.4
2.8
0.22
3 of 6
5 of 6
1 of 6
Sources: Philippine data from JICA-DPWH. 2003. “Roads in the Philippines.” Manila; other countries from the
ASEAN Statistical Yearbook 2004 and the ASEAN Transport and Communication Sectoral Report 1999. ASEAN,
Jakarta.
Major reform measures in the power,
water, transport, and telecoms sector
have already been initiated

Power:
– Critical tariff adjustments implemented
– Ongoing market restructuring and privatization

Water Supply and Sanitation:
– Landmark Manila water concession
– EO279 for water sector financing reform

Road:
– Special Road Fund established
– DPWH reform proposals

Private Sector Participation in Infrastructure:
– BOT Law (1990, amended 1994)
– Public broadly supportive of private sector participation
80
But overall state of infrastructure in the country
has not kept up with rapid population growth and
urbanization
100,000
90,000
70,000
60
80,000
Urban
40
60,000
50,000
30,000
20
40,000
Rural
20,000
10,000
2030
2025
2020
2015
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
0
0
Percent
Thousands
% of population residing
in urban areas
% of
population
residing in
Metro Manila
Low quality of services has emerged as a key
impediment to the economic competitiveness
Infrastructure Ranking in the Global Competitiveness Report
Overall
Infra
Railroad
Port
Air
Electricity
Telephon
e
China
3.5
3.7
3.7
3.9
4.2
5.4
India
2.9
4.7
3.2
4.8
3.0
6.0
Indonesia
3.7
3.2
3.7
4.1
3.6
3.9
Korea
5.2
5.4
5.3
5.7
6.1
6.5
Malaysia
6.1
4.9
6.1
6.2
5.9
6.0
Philippines
2.3
1.5
2.4
3.9
3.6
4.8
Thailand
4.9
3.7
4.5
5.6
5.3
6.1
Vietnam
2.7
2.8
3.1
3.9
3.4
4.9
Ranking
8 out of
8
8 out of
8
8 out of
8
6 out of
8
5 out of 8
7 out of 8
Source: World Economic Forum, “The Global Competitiveness Report, 2003-2004”
Legend: 1=poorly developed and inefficient, 7= among the best in the world
Service levels for the poor are much lower
than the average
Access to basic infrastructure
Percent of population
100
80
60
40
20
0
Poorest
Electricity
Second
Telephone
Middle
Fourth
Piped drinking water
Quintile
Richest
Own flush toilet
Need to increase infrastructure spending from
less than 3% of GDP to at least 5%, and
increase the efficiency of infrastructure
spending in the meantime
9
8
No breakdown
7
Percent
6
5
4
Private
3
Public
2
1
0
Philippines
Indonesia
Albania
Russia
Cambodia
Kazakhstan
China
Note: No breakdown for China, figures are 1991-2000 average. Philippines and Indonesia (2002 figures) , Albania and Russia (2000) and Cambodia
(2001).
Sources: World Bank Privte Participation in Infrastructure Database, World Bank Public Expenditure Reports, China Statistical yearbook (various years).
“Boom-Bust” Infrastructure Cycle
Infrastructure Investments as a share of GDP,
1985-2002
10
Percent
8
6
Total
Private
Public
4
2
0
1985
1987
1989
1991
1993
1995
1997
1999
2001
Capital outlays only.
Sources: Department of Budget and Management; Department of Finance; Commission on Audit; Maynilad Water Services, Inc.; Manila
Water Corporation, Inc.; Optel Ltd.; and World Bank.
The Way Forward –
Four Priorities




A rigorous and sustained fiscal reform
program
Continued specific reforms in key sectors –
particularly power, road and water
Improved central oversight of the planning
and coordination of investments
A few focused investments in the short term
through public- private partnership
Implementing Specific
Reforms in Key Sectors


Basic framework in place – thus huge
returns to some specific measures
Cross cutting reform issue is to
achieve cost recovery
Improving Oversight of
Investment Planning and
Coordination
2001
1999
1997
1995
1993
1991
1989
9
8
7
6
5
4
3
2
1
0
1987

Focus of oversight
responsibilities to
shift from detailed
project-level
approval process to
a broader and more
forward-looking role
Concerns about
efficiency and
transparency of
unsolicited bids
1985

Infrastructure Investment
as a share of GDP, 19852002
Focus on a Few Investments that
Address Infrastructure Bottlenecks
under Public Private Partnership

MTPDP has highlighted the priorities
– Decongesting Metro Manila
– Developing Subic Clark areas


Undertake these investments in close partnerships with
the private sector
New projects should be tendered competitively and
transparently to attract private sector
– Good project preparation is key to be able to conduct
competitive bidding
– Proper management of subsidies: cash subsidies and guarantees
Summary of Messages



Infrastructure is key element of the Philippine
Development Agenda
Many elements of good infrastructure policy
framework are already in place
Some key measures are critical to revive
infrastructure investments
– Fiscal stabilization
– Specific sector reforms, including cost recovery
policy
– Improving planning and coordination
– Well-designed competitive tendering to
maximizing the benefits of private sector
participation