BBB seen to build up government asset base

CLARK, Pampanga, Philippines — Public construction of infrastructure projects under the Build Build Build (BBB) program may expand the government’s asset base, some of which can later be privatized by future administrations to raise needed funds, according to the Department of Finance (DOF).

In a press briefing, Finance Secretary Carlos Dominguez said by constructing some of the country’s infrastructure projects itself, the government would be able to build up its assets.

“While we’re doing all these projects ourselves, the government is building up an asset base that is going to be very large. Future governments that may need money can privatize them,” Dominguez told reporters.

According to the finance chief, now is the right time for the government to increase its assets given its healthy credit rating and good fiscal position.

“We are building up the assets because we can afford to do it now. Our credit is good, we have money, so we’ll build the assets,” he said.

The government is embarking on a massive infrastructure program, which will require P8 trillion to P9 trillion in investments over the medium term.

To fund this program, Dominguez said the government is implementing a tax reform program. He said the program would also be financed through official development assistance (ODA), the issuance of debt securities and the implementation of a hybrid public-private partnership (PPP) scheme, which bids out the operations and maintenance component of the projects to interested parties.

In line with this, Dominguez once again expressed confidence the economy would expand by at least seven percent over the medium term amid the government’s massive investments on infrastructure.

He reiterated the program would create jobs, attract investments and disperse growth to the countryside.

In the first five months, government spending on infrastructure jumped 42.4 percent to P280.8 billion from its year ago level of P197.2 billion.

Dominguez said 30 percent of this went to wages of construction workers, which means about P17 billion is being infused into the economy per month in the form of additional income.

The government’s Build Build Build team visited Clark, Pampanga yesterday to tour the construction site of the New Clark City, which is dubbed as the country’s “new metropolis.”

“We are seeing here today the birth of a new metropolis. The New Clark City will bring in several hundred enterprises and billions in new investments. The excellent logistics and the prospective rail link to Subic will make this area an ideal place to build manufacturing, especially food processing and other export industries,” Dominguez said.

According to the DOF, the project features three main structures, namely the P1.78 billion Clark Green City Government Center, P850 million Clark Commercial Center, and the P3.33 billion Clark Mixed-Income Housing. 

The city will also include a National Government Administrative Center which will host the main offices of several government agencies and house back-up facilities for all state offices to ensure operational continuity in the event of a

World-class sports facilities will also be built within the City in time for the country’s hosting of the Southeast Asian Games in November next year.