{"id":19925,"date":"2024-07-26T03:00:32","date_gmt":"2024-07-26T03:00:32","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/faster-infrastructure-development-needed-to-ensure-growth-sp\/"},"modified":"2024-07-26T03:00:32","modified_gmt":"2024-07-26T03:00:32","slug":"faster-infrastructure-development-needed-to-ensure-growth-sp","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/faster-infrastructure-development-needed-to-ensure-growth-sp\/","title":{"rendered":"Faster infrastructure development needed to ensure growth \u2014 S&P"},"content":{"rendered":"
\n

MORE INVESTMENTS in infrastructure<\/span> assets are needed to unlock faster growth rates for emerging Asian economies like the Philippines, S&P Global said.<\/p>\n

\u201cA marked improvement in infrastructure and logistics will support the next leg of growth for the emerging markets of Asia,\u201d it said in a report.<\/p>\n

\u201cEconomies can unlock higher growth rates through accelerated investment in infrastructure assets on top of infrastructure eff<\/span>iciency gains.\u201d<\/p>\n

S&P Global said that eff<\/span>icient and improved infrastructure will underpin robust growth in emerging Asia-Pacif<\/span>ic, excluding China.<\/p>\n

If infrastructure projects are accelerated, it said the Asia-Pacif<\/span>ic region can nearly double its economy to $11.4 trillion by 2033 from $6.6 trillion in 2023.<\/p>\n

\u201cThis translates to an annual real growth rate of about 5.5%. Our baseline forecast incorporates improved infrastructure as a cornerstone supporting these strong growth outcomes,\u201d S&P Global said.<\/p>\n

In the region, several governments, such as the Philippines, Indonesia, India, Malaysia and Vietnam, are prioritizing infrastructure development in their policies and reforms.<\/p>\n

\u201cThe National Economic and Development Authority (NEDA) coordinates flagship infrastructure projects such as a new airport in Manila, a heavy rail project linking ports in Subic, Manila, and Batangas, and several highway projects,\u201d it said. <\/span><\/p>\n

Infrastructure is one of the Marcos administration\u2019s priority investment areas. The NEDA Board has so far approved 185 infrastructure flagship projects with a total value of P9.5 trillion.<\/p>\n

The flagship projects cover physical and digital connectivity, water resources, agriculture, health and energy, among others.<\/p>\n

The government targets to spend 5-6% of gross domestic product (GDP) on infrastructure annually.<\/p>\n

Latest data from the Budget department showed that infrastructure spending jumped by 18.2% to P335.7 billion as of end-April.<\/p>\n

Meanwhile, S&P Global said the public sector usually undertakes more infrastructure projects, since the return on investments are spread over two or more decades \u201cmeaning duration risk for the private sector is high.\u201d<\/p>\n

Infrastructure operators may also find it diff<\/span>icult to turn a prof<\/span>it on these projects, putting more onus on the public sector.<\/p>\n

\u201cThis does not rule out a role for the private sector. The private sector favors bottom lines and is hence better at innovating and can typically operate faster and more eff<\/span>iciently.\u201d<\/p>\n

\u201cPrivate capital can ease the capital outlay burden on cash-strapped governments already committed to wide-ranging spending priorities. Still, the durations, regulated rates of return, and other project risks mean that the public sector dominates the space.\u201d<\/p>\n

S&P Global noted that the region\u2019s public assets relative to economic size \u201chave not been deepening signi<\/span>f<\/span>icantly.\u201d <\/span><\/p>\n

It said that public <\/span>f<\/span>ixed-investment assets are \u201crelatively low\u201d in the Philippines and Indonesia.<\/span><\/p>\n

\u201cHowever, in the Philippines and Indonesia public-private partnership (PPP) capital assets are higher than global averages. In the Philippines they are about 6.7% of GDP; in Indonesia it is about 4.2% of GDP, which would add to the available total public assets,\u201d it added.<\/span><\/p>\n

The government has also been pushing for more PPP projects. In December, President Ferdinand R. Marcos, Jr. signed the PPP Code, which seeks to streamline the framework for PPPs.<\/span><\/p>\n

S&P Global said that the logistics sector has shown improvements in recent years.<\/p>\n

\u201cIndia and the Philippines have seen the largest improvement since 2014 whereas Vietnam, Thailand, and Malaysia saw more modest improvements. In Indonesia, the logistics performance score declined marginally.\u201d<\/p>\n

Antonio A. Ligon, a law and business professor at De La Salle University in Manila, noted that the government is \u201cdoing its best\u201d to implement the necessary reforms to attract investments in infrastructure.<\/p>\n

\u201cHowever, the implementation of these measures must be strengthened. For example, an efficient implementation of the ease of doing business (and) ef<\/span>fective marketing showcasing areas where infrastructures development can be done,\u201d he said in a Viber message.<\/p>\n

Nigel Paul C. Villarete, senior adviser on PPP at the technical advisory group Libra Konsult, Inc., said local government units (LGUs) must increase support to fast-track infrastructure projects.<\/span><\/p>\n

\u201cOftentimes the National Government (NG) machinery is somewhat cumbersome rolling our projects,\u201d he said in a Viber message. \u201cMany of the upcoming projects may be achieved through PPP with the LGUs.\u00a0 <\/span>This will also free up the NG to just deal with the major ones.\u201d<\/p>\n

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said that infrastructure investments \u201chave always provided a backdrop for economic growth in other areas of the economy.\u201d<\/p>\n

\u201cNew routes will have faster travel times, and economic efficiencies such as lower fuel costs may translate to lower prices of goods,\u201d he said via e-mail.<\/span><\/p>\n

\u201cResolving the traffic gridlock, whether through better and more railways or more efficient transport systems, allows commuters to spend more time doing other productive or economy-impactful activities instead of being stuck in traffic,\u201d he added.<\/span><\/p>\n

POWER
\n<\/b>In a separate report, S&P Global also noted the need to increase investments in the power sector amid expectations of more demand.<\/p>\n

\u201cPower demand over 2024-2025 will grow 5-7% in India, Indonesia, and the Philippines, (and) about 3% in Singapore, Malaysia and Thailand.\u201d<\/p>\n

S&P Global said that increasing investments for the energy transition will \u201ckeep capital expenditures and leverage elevated.\u201d<\/p>\n

\u201cModerating fuel costs provide some relief to lagging generation and distribution <\/span>f<\/span>irms,\u201d it added.<\/span><\/p>\n

In his State of the Nation Address on Monday, Mr. Marcos said that he expects the country\u2019s power supply to \u201cincrease at a steady pace to meet our growing demand in the next few years.\u201d<\/p>\n

\u201cNonetheless, we are continuously diagnosing and urgently addressing power shortages, as well as the systemic causes of blackouts in unserved and underserved areas,\u201d he added.<\/span><\/p>\n

The government is aiming to increase the share of renewable energy in the country\u2019s power mix to 35% by 2030 and 50% by 2040. \u2014 Luisa Maria Jacinta C. Jocson <\/b>with input<\/i> from<\/em> Beatriz Marie D. Cruz <\/b><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

MORE INVESTMENTS in infrastructure assets are needed to unlock faster growth rates for emerging Asian economies like the Philippines, S&P Global said. \u201cA marked improvement in infrastructure and logistics will support the next leg of growth for the emerging markets of Asia,\u201d it said in a report. \u201cEconomies can unlock higher growth rates through accelerated [\u2026]<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[4717,14644,1573,10251,9055,11413,1448,15775,11],"class_list":["post-19925","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-needed","tag-bworldonline","tag-development","tag-ensure","tag-faster","tag-growth","tag-infrastructure","tag-sp","tag-years"],"yoast_head":"\nFaster infrastructure development needed to ensure growth \u2014 S&P - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/faster-infrastructure-development-needed-to-ensure-growth-sp\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Faster infrastructure development needed to ensure growth \u2014 S&P - 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