THE ECONOMIC response to the pandemic has been to persevere with the ‘Build Build Build’ program. Quite right. Not to do so would mean more unemployment and more poverty.
Nevertheless, the incoming administration faces severe challenges if we are to avoid recession. This is because our indebtedness has increased tremendously and now stands at a record P12.76 billion. More seriously, our debt to gross domestic product ratio has increased from just under 40 percent in 2016 to just over 60 percent now.
In other words, our debt has increased much more quickly than our rate of growth. We cannot carry on like this for much longer.
What can be done?
One possibility is to make more effort to engender successful public-private partnership (PPP) projects. The Aquino administration was not particularly successful in this arena. Projects were not always well-conceived. It appeared that the government side did not always display the empathy needed with the private sector in order for the PPP process to be successful. There were examples where the public sector saw their private counterparts as a bottomless pit of funds which would sustain any project, no matter how extravagant and unrealistic it appeared to be.
One example was to enhance the facilities of Bacolod-Silay international airport. A project was conceived which would necessitate the expenditure of P20.26 billion by the private sector in order to come to fruition. Not surprisingly, the private sector demurred so the project was abandoned.
What was needed, and I believe this is now appreciated, that the public-private conversation needs to be more vigorous.
In the case of Bacolod airport, the government side believed that a more fully functional airport was required including restaurants and a shopping mall. A provincial airport does not need this. All that is needed is a longer runway to accommodate international flights. I hope this is implemented before the end of the incoming administration (2022-2028).
We need input from the Department of Tourism and consultations with airlines are necessary.
Cebu Pacific, despite having two pandemic-induced challenging years (2020, 2021) with losses of over P20 billion in each year, is still adventurously increasing its international flights. I hope this courageous decision will help CEB to become profitable again soon.
In summary, I believe that there are a significant number of infrastructural projects which could be implemented through the auspices of the PPP scheme./PN
