Three key economic reforms

Big business groups last week praised lawmakers for passing three key economic reform measures aimed at boosting investments, improving transparency in government transactions, and speeding up key infrastructure projects.

The Makati Business Club (MBC) lauded Congress for approving amendments to the Foreign Investors’ Long-Term Lease Act, and the E-Governance Act, and the Right of Way (ROW) Act, reforms that “aligned with our advocacies for improvements in governance, infrastructure, and transparency, which we see as key drivers to attract more investors and create more jobs.”

 The Filipino Chinese Chambers of Commerce and Industry Inc. (FFCCCII), for its part, noted that the business sector had long been urging the government to enact these reforms to attract more foreign investments and ease bottlenecks in infrastructure development.

The changes to the long-term lease law seek to encourage more foreign capital by extending the allowable lease period to 99 years from 75 years previously, thus bringing the Philippines more in line with regional competitors and address the major issue often cited by prospective foreign investors on their limited ability to secure land for extended periods, which made long-term planning and investment riskier.

The E-Governance Act, meanwhile, seeks to promote transparency and efficiency by expanding digital access to government services. By mandating the digitization of public services and integrating platforms across agencies, the reform aims to reduce red tape and improve the overall ease of doing business needed by investors.

High ROW costs

The most important of the three is the ROW (Right of Way) amendments, which will hopefully put an end to a problem that has nagged previous administrations as far back as the 1970s. The ongoing P448-billion Metro Manila subway project is a case in point.

The administration of the late former president Benigno Aquino III removed the project from its pipeline due to issues such as high ROW costs. It was included in the ambitious “Build, Build, Build” program of former President Rodrigo Duterte in 2017 as the Mega Manila Subway and carried over to the present administration of President Marcos as part of its P9-trillion infrastructure flagship projects list. It was targeted for partial operation before the end of Mr. Marcos’ term in 2028.

It is designed to interconnect with other rail systems — the operating Lines 1 and 2 of the Light Rail Transit system and the Metro Rail Transit Line 3 on Edsa; the MRT Line 7 (another project that has been delayed for years now), and the North-South Commuter Railway Extension at the FTI and Bicutan Stations.

Thorny issue

Based on a plan dated Sept. 27, 2019, construction of a section of the subway was to start in 2019 and operate in 2022. Construction of the remaining sections was to begin in 2022 and operate in 2025. It has become doubtful if partial operation can start by 2028 as ROW problems continue to hound the project.

These same issues have also delayed the completion of a key segment intended to link the North Luzon Expressway–South Luzon Expressway connector road to the Metro Manila Skyway Stage 3 as well as many other important infrastructure projects across the country.

The Accelerated and Reformed Right-Of-Way Act that will amend the current ROW law addresses the thorny issue of compensation, perhaps the most common cause of ROW delays, by updating the standards for assessing the value of property subject to negotiated sale using Republic Act No. 12001, or the Real Property Valuation and Assessment Reform Act, which was signed in January this year.

Ease of doing business

At the end of the day, however, a law becomes truly effective only when it is put into action. As MBC noted, it hopes that the proper implementation of these reforms will achieve the intended goal of enhancing the country’s competitiveness.

For the E-Governance law, its success will depend a lot on whether local government units, which are notorious for bureaucratic red tape, embrace the digitization of public services and for the different departments to integrate their platforms across agencies as mandated by the proposed law.

This will hopefully improve the overall ease of doing business and attract investors, particularly outside the traditional urban centers of Metro Manila, Cebu, and Davao.

For the ROW amendments, the involvement of all concerned agencies will be crucial to successfully implement these reforms, which the FFCCCII describes as essential changes to break a cycle of failure.

“Standardized valuation based on fair market principles, guaranteed funding for land acquisition, and structured resettlement programs address the root causes of delay: arbitrary pricing, fiscal uncertainty, and inadequate planning,” it pointed out.

And as Transportation Secretary Vince Dizon emphasized, solving ROW issues is not just a problem of his agency, but concerns that need “a whole-of-government approach.”

Source: Inquirer

Longest road mountain tunnel nears completion.

The Department of Public Works and Highways (DPWH) has entered a significant stage in the construction of the 2.3-kilometer twin-tube tunnel—soon to be the longest road mountain tunnel in the Philippines—serving as a key feature of the 45.5 kilometer, four-lane Davao City Bypass Construction Project (DCBCP).

This flagship infrastructure is being undertaken in line with President Ferdinand R. Marcos Jr.’s Build Better More program, which aims to modernize the country’s transport network and support inclusive development, under the broader vision of Bagong Pilipinas - a new and better Philippines.

According to DPWH Senior Undersecretary Emil K. Sadain, the DCBCP has recently completed a major milestone, as the north and south portal ends of the northbound tunnel were finally connected.

Located at the challenging mountainous terrain, DCBCP will offer motorists a safer and more efficient alternative route, effectively decongesting traffic within Davao City and enhancing regional connectivity.

In his report to DPWH Secretary Manuel M. Bonoan, Undersecretary Sadain noted that the construction breakthrough of the northbound tunnel, along with the ongoing excavation works for the remaining 202 meters of the southbound tunnel—which is now 91 percent completed—marks significant progress in this strategic infrastructure project.

Financed through a combination of a loan agreement with the Japan International Cooperation Agency (JICA) and local government funds, the DCBCP spans from Barangay Sirawan in Toril, Davao City to Barangay J.P. Laurel in Panabo City. Once completed, it is expected to drive economic growth, improve logistics, and connect communities - key goals under Bagong Pilipinas.

On April 11, 2025, Senior Undersecretary Sadain led an inspection of the road mountain tunnel under Contract Package (CP) I-1, covering 10.7 kilometers and now 58.7 percent completed by the Shimizu-Ulticon-Takenaka joint venture. He was joined by UPMO-Roads Management Cluster 1 Project Director Benjamin A. Bautista, UPMO-Bridges Management Cluster Project Director Rodrigo I. Delos Reyes, and Stakeholders Relations Service Director Randy R. Del Rosario.

The team also evaluated the progress of CP II-1, which includes several bridges being constructed by the CavDeal/WECI/Coastland Joint Venture, with support from UPMO Project Managers Joselito B. Reyes, Ricarte Mañalac and Emmanuel Regodon, Project Engineers Juan M. Diña Jr. and Oliver Angeles, and Engrs. Earl Nicholas F. Rada and Divina B. Bulan.

The locally funded portions of the bypass road under CP II-1 and CP II-2 are now 72.83 percent and 63.89 percent completed, respectively. CP II-1, spanning 2.54 kilometers and valued at P4.33 billion, features a 1.3-kilometer four-lane road and seven bridges, with completion targeted in the first quarter of 2026. Meanwhile, CP II-2—a 3.52-kilometer road section worth P4.60 billion—is slated for completion in the third quarter of 2026.

Other segments under CP I-2 and CP I-3 are also progressing steadily while Package II-3 will soon start its procurement activities.

Once completed, the Davao City Bypass will reduce travel time between Toril and Panabo City from 1 hour and 44 minutes to just 49 minutes, stimulating economic activity, expanding business opportunities, and boosting tourism across Davao Region and Mindanao—concrete steps toward building a Bagong Pilipinas.

Source: Philippine Resources

Infrastructure spending declines in December

Infrastructure spending slumped by nearly 20% in December, but still exceeded the full-year program, the Department of Budget and Management (DBM) said.

Latest data from the DBM showed that spending on infrastructure and other capital outlays fell by 19.8% or P36.3 billion to P146.7 billion in December 2024 from P183 billion in the same month in 2023.

“This was attributed to the combined impact of the base effects of high capital disbursements in 2023, as well as the ongoing processing and release of cash allocations for payments of completed and ongoing capital outlay projects of various departments/agencies during the latter part of 2024,” the DBM said.

For the full-year, expenditures on infrastructure and other capital outlays jumped by 10.1% to P1.33 trillion from P1.2 trillion in 2023. This also exceeded the P1.24-trillion program by 6.7%.

The DBM attributed the faster infrastructure spending to the implementation of the Department of Public Works and Highways’ (DPWH) banner infrastructure projects as well as defense modernization projects of the Department of National Defense.

DBM data showed overall infrastructure disbursements rose by 8.9% to P1.545 trillion in 2024 from P1.42 trillion in 2023. It exceeded the P1.473-trillion program for 2024 by 4.9%.

“This was equivalent to 5.8% of GDP, well within the 5-6% target for 2024 and sustaining the 5.8% outturn in 2023,” the department said.

Infrastructure disbursements also include infrastructure components of subsidy and equity to government-owned and -controlled corporations and transfers to local government units.

“This was credited mainly to the accelerated infrastructure spending of the DPWH for its accelerated implementation of construction activities, particularly from carry-over or previous years’ projects, progress billings from completed ongoing infrastructure projects, as well as the direct payments made by development partners for foreign-assisted rail projects of the Department of Transportation,” the DBM said.

Oikonomia Advisory and Research, Inc. Economist Reinielle Matt M. Erece said the P122.2-billion increase in infrastructure and capital outlays in 2024 was partly driven by defense modernization programs of the government.

“This can be in response to the heightened geopolitical tensions felt by a lot of countries,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said faster infrastructure spending last year can be partly attributed to preparations for the May elections.

“(This is) part of the preparations for the midterm elections, as basis for accomplishments that are consideration for the voters to choose some candidates based on their completed projects and programs,” he said.

Mr. Ricafort said the government likely expedited infrastructure projects in the first three months of 2025 ahead of the election ban.

The Commission on Elections’ ban on public works spending began on March 28 and will run for 45 days. The midterm elections are scheduled for May 12.

Mr. Erece said he expects slower infrastructure spending as the government “reviewed and removed some of the unprogrammed appropriations and other expenses that the administration felt were unneeded, at least in the short term.”

Source: Business World