CAPAS: National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said private construction may return to pre-pandemic level next year with the easing of inflation and interest rates.
At the Build Better More Infrastructure Forum here Friday, Balisacan said the performance of construction sector has yet to fully recover since the coronavirus disease 2019 (Covid-19) pandemic struck in 2020.
‘This lag is attributable to several factors. First, we expected some investor hesitation owing to initial policy uncertainty brought about by elections 2022. On the other hand, lingering and persistent inflation, and a challenging external environment particularly a strong dollar in the past two years to the elevated interest rates we see today,’ he said.
The NEDA chief said the current spending level of the private sector in construction activities is ‘not that too far’ from the pre-Covid-19 level, so it is possible that private spending on construction will bounce back pre-pandemic level in 2025.
He added that as the Marcos administration usher the country into the golden age of infrastructure through the Build Better More infrastructure program, more investors both from local and foreign sources are expected to put their capital in these projects.
‘With public investments coming in strongly, that will be the signal for the private sector to come in too, especially that regional and global community investment climate is improving, notwithstanding these geopolitical tensions, because that’s another factor that can matter. But I think, we are there,’ Balisacan said.
He said the easing of inflationary pressures that could lead to policy rate cuts will propel the private sector to borrow money and put their capital in the 185 infrastructure flagship projects (IFPs) of the government.
ROW bill
Meanwhile, Balisacan highlighted the need for the passage of the right-of-way (ROW) bill into law to ensure the timely completion of flagship infrastructure projects.
He prodded the Congress to act on the pendi
ng bill, saying that right-of-way issues remain the ‘most critical’ challenge for completion of critical infrastructure projects.
‘Of course the right way issue remains the most critical challenge that we are facing. So, we are going back to Congress for the amendment of the right-of-way law,’ Balisacan said, adding that they are hoping for its passage within the President’s term.
Balisacan said among the game-changing provisions of the proposed law is the valuation of property which would ensure ‘faster and more efficient way of resolving conflicts between the private owner and government’, while at the same time ensuring ‘fairness in respect to ownership.’
For his part, Finance Undersecretary Rolando Tungpalan said the government is also looking at ways to ease expropriation process.
‘It’s a very long, tedious process and we’re finding ways to speed it up that would be fair to the both the land owner and the government enjoying the benefits of government,’ he said.
Earlier, President Ferdinand R. Marco
s Jr. ordered the return to the ‘old process’ of resolving right-of-way issues, which include securing the writ of possession after making a 15 percent initial payment for the property affected.
The step is aimed at addressing bottlenecks in the infrastructure projects while waiting for the passage of the right-of-way bill.
Source: Philippines News Agency
