USA investments on Philippine ‘Build, Build, Build’ infrastructure program is near zero: Finance department

MANILA, Sep 18, 2019, Inquirer. No wonder Philippine President Rodrigo Duterte isn’t a fan of the United States. Finance Secretary Carlos Dominguez III said there’s a dearth of US investments in the Duterte administration’s multi-trillion peso “Build, Build, Build” infrastructure program despite the program’s good record, reported the Inquirer.

“I was just reflecting on what we’ve done in the first half of the President’s term, and I think this administration can do two things at once: we can chew gum and walk across the room at the same time,” the Department of Finance (DOF) quoted Dominguez as saying at a recent meeting of the US-Asean Business Council.

“We can do serious policy reforms as well as implement them properly, and that we can deliver on our infrastructure program on time and on budget,” Dominguez said at that meeting, according to a statement by the DOF.

A high-level delegation of the Washington-based group espousing to advance US business interests in Southeast Asia was in town, led by its president and chief executive Alexander Feldman and senior vice president Ambassador Michael Michalak, with representatives from giant American firms in tow.

While Dominguez noted that there was interest among US businesses to take part in the massive infrastructure program, the finance chief told members of the US-Asean Business Council: “Now is a good time to check if there has been any real participation from you in our ‘Build, Build, Build’ projects,” citing that the group supposedly included America’s leading construction and infrastructure companies.

The DOF said Dominguez also lamented that the US government had been “reluctant in providing compact assistance to the Philippines under the Millennium Challenge Corp. (MCC).

During the meeting, the DOF said Dominguez ”recalled that the compact assistance from MCC of about $200 million would have helped improve infrastructure in the eastern coast of Luzon, but the Philippines ‘for one reason or another, didn’t make the cut.’”

“If American investors are interested, those exploring opportunities outside the congested Metro Manila area can train their sights on the New Clark City (NCC) in Central Luzon that the government is transforming into the country’s first green and smart metropolis,” Dominguez said.

“The main venue of this year’s Southeast Asian (Sea) Games, the NCC will have a world-class Clark International Airport that will be linked to the Subic Bay Seaport by a railway and expressway, making import and export transactions convenient for locators,” according to Dominguez.

Dominguez made these statements while the Philippines has been shortlisted to receive possible financial aid from the US for development—mostly infrastructure—projects next year, and even as it was Manila that supposedly declined a fresh grant from Washington two years ago.

The US aid agency MCC this month included the Philippines among 63 low-income and lower-middle income countries that were candidates for the Millennium Challenge Account Assistance for fiscal year 2020.

The Philippines and 59 other low-income countries were deemed eligible for assistance from the MCC as they had per capita income below the Washington-based multilateral lender World Bank’s lower middle-income country threshold for fiscal year 2020, equivalent to gross national income per capita of $3,995.

They were among the 75 countries earlier identified by the World Bank to have had the lowest per capita income and were not ineligible to get economic assistance from the US under its Foreign Assistance Act of 1961.

In 2017, the Philippines withdrew from the planned second MCC grant to build better roads along the coast of Eastern Luzon.

“The government of the Philippines has decided not to move forward with the development of a second MCC compact. MCC is proud of the achievements of our first compact with the Philippines, and both MCC and the United States are proud of our longstanding positive relationship,” the MCC had said.

In 2016, the MCC deferred making a decision with regards a new compact for the Philippines as the country had been “subject to a further review of concerns around rule of law and civil liberties” under then US president Barack Obama, who had been critical of Duterte’s war on drugs.

In its latest scorecard that serves as basis for assistance to the US’s development partners, the MCC had given the Philippines a failing mark in “rule of law” while the areas of “control of corruption”, “democratic rights” and more indicators in general gained passing marks.

The MCC’s fiscal year 2019 scorecards released in November last year granted the Philippines passing grades in 14 of the 20 indicators–fiscal policy, inflation, regulatory quality, trade policy, gender in the economy, and land rights and access under “economic freedom”; political rights, civil liberties, control of corruption, government effectiveness, and freedom of information under “ruling justly”; as well as natural resource protection, girls’ secondary education enrollment rate, and child health under the “investing in people” category.

Last year’s scorecard showed an improvement as control of corruption got a failing mark in 2018, and only 12 indicators received passing marks.

However, the country again garnered a failing grade in rule of law under the “ruling justly” category, which the MCC said was based on the World Bank and Brookings Institution’s 2018 update of the Worldwide Governance Indicators dataset mostly reflecting performance in 2017.

Under “economic freedom”, the Philippines also failed in access to credit and business start-up.

Also, scores in health expenditures, primary education expenditures as well as immunization rates under the “investing in people” category failed.