This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/18/2019

Recognizing the nation`s critical infrastructure needs, the Duterte Administration targets to spend $180 billion on infrastructure projects under its Build, Build, Build program (http://www.build.gov.ph/) until 2022.  The Department of Transportation (DOTr), Department of Public Works and Highways (DPWH), Bases Conversion Development Authority (BCDA), National Economic Development Authority (NEDA), Department of Finance, and Department of Budget and Management are collaborating to implement the program.  Tax legislation has been implemented to help provide funding, bringing in additional revenue for project execution in four stages for tax reform.   As of May 2019, 61projects are listed in the Build, Build, Build website (http://www.build.gov.ph/) including 24 road, highway and bridge projects, 11 rail/subway, 17 airport  4 mass transit, 3 new cities, 1 seaport, and 1 communication and information projects.

The 2018 World Economic Forum (WEF) Global Competitiveness Report ranks the Philippines 56th out of 140 countries no improvement from its ranking in the 2017-2018 report,  and 92nd in the infrastructure category. The nation is known for challenging traffic conditions, long commutes, one of the slowest internet speeds in Asia, and a lack of economic productivity and quality of life that results from such factors. Asia Development Bank`s Infrastructure report notes the critical need for infrastructure in the ASEAN region, stating that $1.7 billion needs to be spent annually until 2030 to maintain momentum and economic growth.

The Government of the Philippines has welcomed development aid loans from donor nations, allocating high priority projects to such donors. The Japan International Cooperation Agency (JICA), Korea International Cooperation Agency (KOICA), and the Chinese Government have either completed or pledged ODA funds to finance rail, airport, road, and bridge projects. While some nations have quickly delivered on their financial commitments, others have taken more time, and it is not uncommon for projects to be reassigned, or broken up into different portions financed by new/different players. Project priorities, funding sources, tendering procedures, and completion dates are in flux, presenting a challenging and confusing landscape to say the least.

JICA has funded feasibility studies and transport masterplans and has a long history in the Philippines of providing tied-aid loans. In fact, JICA`s net contribution can be $5.98 billion. It has confirmed ODA for the Metro Manila Subway Project (Phase 1) , a $6.86 billion, 25-kilometer railway from Mindanao Avenue in Quezon City to the Ninoy Aquino Airport in Pasay City in Metro Manila; Philippine National Railway (PNR) North 1 project, a $2.1 billion 38-kilometer passenger railway from Manila to Malolos, Bulacan in addition to the PNR North 2 project, a 68.7-kilometer extension of North 1 all the way to the New Clark City. PNR 2 is also receiving ADB financing. The rehabilitation of Metro Rail Transit Line 3, a 16.9-kilometer light rail system with 13 stations spanning across EDSA, is also financed by JICA.

Leading Sub-Sectors

  • Companies that finance, design, construct, operate and/or maintain transportation infrastructure.
  • Equipment, products, and technologies that can be used in airport, port, and rail, road and bridge projects.
  • Security systems.
  • Command and control systems.
  • Communication systems.

Opportunities

Detailed information on the over 60 “Build, Build, Build” projects may be viewed from the following website (http://www.build.gov.ph/). Project categories are also summarized below.

Rail
Prior to WW2, the Philippines actually had a 2300-kilometer rail network. Unfortunately, it now only has 77 kilometers and modernizing and strengthening this network has been an Administration priority as it would improve logistics and distribution in addition to commute times into Metro Manila. Statistics put the daytime population of Manila at 15 million, and the nighttime population at 12, indicating that 3 million commute into the city every day. Hence, commuter rail projects are a huge priority in an effort to de-congest Metro Manila. The following have been confirmed as being funded by Japanese tied-aid:
  • PNR Clark Phase I (Tutuban-Malolos)/38 km./$2.03 B
  • Metro Manila Subway (Mindano Avenue-NAIA)/35.0 km./$6.85 B
  • PNR Clark Phase 2 (Malolos-New Clark City)/69.5 km./ $2.88 B
  • PNR Los Baños (Tututban-Los Baños)/72.0 km./ $2.58 B

Airports
Airport development projects are also underway to de-congest the country`s gateway, Ninoy Aquino International Airport (NAIA). Originally built for a capacity of 30 million, the airport now serves 42 million, and expects to serve 54 million by 2020. As part of larger effort to de-congest Metro Manila, the Government plans to relocate offices to Clark City, 57 miles away. The goal would be for all Government offices to relocate to Clark, de-congesting Manila and NAIA, and redirecting traffic to Clark International Airport.

Clark
The Engineering, Procurement and Construction (EPC) contract for the New Terminal Building of the ClarkInternational Airport was awarded in December 2017 to a consortium of Megawide Construction Corporation and GMR Infrastructure.  On the other hand, the Operation & Maintenance (O&M) Concession for the Clark International Airport, which will cover the management, operations, and maintenance of the airport including the existing terminal; and, the completion, fit-out and management, operations, and maintenance of the New Terminal Building, was awarded to the North Luzon Airport Consortium (NLAC) on December 2018.  Changi Airports Philippines Ltd. is a member of the consortium.

NAIA
The Department of Transportation granted Original Proponent Status to the NAIA Consortium’s $1.96 Billion unsolicited proposal to rehabilitate, upgrade and expand. The NAIA Consortium is composed of seven Philippine conglomerates with Changi Airports International as the technical adviser. The NAIA Consortium hopes that the Swiss Challenge for the project can begin by mid-2019. Under the Swiss challenge, companies are invited to submit counterproposals to the project, which the original proponent may then match.

Bulacan
San Miguel Holding Corporation submitted an unsolicited proposal for the New Manila International Airport (Bulacan International Airport) Project. The $14 billion (PhP735.634 billion) project involves the construction, operation, and maintenance of the Bulacan International Airport with an area of approximately 2,500 hectares.  The project involves airport development (i.e., passenger terminal building, with airside and landside facilities) that can accommodate 100 million passengers per annum.  It has an 8.4-kilometer airport toll road component.   In April 2019, the Department of Transportation issued an invitation to local and foreign companies to submit comparative proposals under a Swiss challenge bidding process to finance, design, construct, operate, and maintain the project under a 50-year concession period.  Opening of bids will be on July 31, 2019.

Sangley
There are also unsolicited proposals for the development of an international airport at Sangley Point, a former U.S. naval base, in Cavite province, which is 36 miles away from NAIA. Development of Sangley Point requires land reclamation.

Roads and Bridges
There are road and bridge projects nationwide that are either on the conceptualization, review and evaluation, pre-construction, procurement or construction stages.  The projects are funded or will be funded either by the Philippine government, ODA, or PPP. Information on these projects are at http:// www.dpwh.gov.ph and http://www.build.gov.ph.

The DPWH and JICA are developing an updated master plan for the construction of new road network throughout the Philippines.  The master plan will also include the concept of network resilience against disasters and hazards, identification of priority projects and conduct of pre-feasibility studies.   The previous master plan was completed in 2010. 

Web Resources

Asian Development Bank http://www.adb.org/
Build, Build, Build  http://www.build.gov.ph/
Department of Public Works and Highways  http:/www.dpwh.gov.ph
Department of Transportation  http://www.dotr.gov.ph
Public-Private Partnership Center  http://ww.ppp.gov.ph

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.