Comprehensive and Integrated Infrastructure Program

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Comprehensive and Integrated Infrastructure
Program

• Philippines Development Forum
• Cebu City, Philippines
• March 8, 2007

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Promoting Global Competitiveness and Exports to
Create Jobs

• To strengthen and sustain our global
  competitiveness and create
• 10 million jobs, we will focus on five strategic
  measures
• Make food plentiful at reasonable prices to make
  our labor cost globally competitive.
• Reduce cost of electricity to make cost of
  running our machines and our manufacturing
  processes regionally competitive.
• Modernize physical infrastructure and logistics
  system at least cost to ensure efficient
  movement of goods and people.
• Mobilize and disseminate knowledge to upgrade our
  technologies and increase our peoples
  productivity.
• Reduce red tape in all government agencies to
  reduce transaction costs.

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CIIP Investment Requirement by Financing Source
Total investments PhP 1,983.9 billion
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National Government Total Budget Requirement
(CIIP vs. DBM Proposed Budget 2006-2010)
-
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Criteria for Selection (List of Selected Priority
Infrastructure Projects)

• Must be in the Comprehensive and Integrated
  Infrastructure Program (CIIP)/SONA
• Ready-to-Go Projects
• c) Reasonable Rate of Return
• d) No Major Issues
• e) High Socio-economic impact

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1. BICOL EMERGENCY POWER RESTORATION PROJECT
(Facilities damaged by typhoon Reming) Descriptio
n Component 1 Installation of temporary 230
KV by-pass sections repair of 887 wooden
steel poles. Component 2 Replacement of 116
toppled steel towers repair of other damages
to substation facilities equipment. Implementi
ng Agency TRANSCO Total Project Cost PhP
1,115 Million Financing Mode Loan Implementatio
n Period Immediate Remarks Approved in
principle by ICC-CC on 13 December 2006
due to emergency nature.
Location Bicol Region
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2. PALAWAN SOUTH ROAD (Junction Irawan-Narra-Abo-Abo Section-Bataraza-Rio Tuba Section) Description Rehabilitation/improvement of the 217.18 km road, which serves as the main trunkline of the Southern Municipalities of Palawan. Implementing Agency DPWH Total Project Cost PhP 3,130.62 Million Financing Mode Loan Implementation Period 2007-2010 Remarks Endorsed by ICC-TB on 5 December 2006 for ICC-CC approval. EIRR 29.66 NPV _at_ 15 PhP 2.441 Billion
Location
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Project Location
3. PANGUIL BAY BRIDGE Description Construction
of main bridge, approach viaducts,
approach roads that provide direct transport link
between Central Mindanao Northern
Mindanao. Implementing Agency DPWH Total
Project Cost PhP 2,670.92 Million Financing
Mode GOP/PPP Implementation Period
2007-2010 Remarks Project approved by the ICC
on 18 January 2007.
Misamis Occidental
Tangub
Tubod
Lanao Del Norte
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4. BINAN-SUCAT 230 KV T/L PROJECT Description
Installation of an additional 14 kms of 230 kV
line at Biñan Sucat substations to increase
the power transfer capacity of the existing
Biñan-Sucat line. Implementing Agency
TRANSCO Total Project Cost PhP 870.43
Million Financing Mode Loan or
PPP Implementation Period 2007-2008 Remarks
Approved by the ICC CC on 15 February 2007.
FIRR 28.23 FNPV PhP 5.62 B
at WACC 11.67 EIRR 63.54
ENPV PhP 35.47 B at SDR 15
Location Sucat,Paranaque Binan, Laguna
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5. LINE 1 NORTH EXTENSION PROJECT Description Construction of a 5.4-km elevated line seamlessly from Monumento Station of Line 1 to North Avenue Station of Line 3. Implementing Agency LRTA Total Project Cost PhP 6,209 Million Financing Mode BT Implementation Period 2007-2010
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6. NORTHRAIL-SOUTHRAIL LINKAGE PROJECT
(Alabang to Calamba, 27.1 kms) Phase
II Description Rehabilitation of the Existing
27.105 km into a double track railway the
acquisition of five (5) new 3-car train sets.
Implementing Agency DOTC / PNR Total Project
Cost PhP 4,520.93
Million Financing Mode Loan Implementation
Period 2007-2010 Remarks Approved by ICC on
13 December 2006. EIRR
18.39 NPV _at_ 15 PhP 871.6 M
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7. LRT LINE 6 (Line 1 South Extension) Description Extension of the existing LRT Line 1 from Baclaran station to the cities of Parañaque, Las Piñas, Adjoining municipalities of Bacoor, Imus, Dasmariñas in the Cavite province. Implementation Agency LRTA Total Project Cost PhP 35,474.4 Million Financing Mode Loan/GOP/BOT Implementation Period 2007-2010 Remarks Approved by ICC-CC on 13 December 2006 NG budgetary requirements is being discussed. EIRR 20 (high VOT assumption), 16 (low VOT assumption)
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8. AGNO RIVER INTEGRATED IRRIGATION
PROJECT Description Rehabilitation of
Agno River Irrigation System (ARIS)
Ambayaoan-Dipalo River Irrigation System
(ADRIS) with a total of 34,450 has. service areas
in Pangasinan, Region I. Rice production is
projected to increase by 120,000 metric tons per
year benefiting around 28,000 farm families.
Implementing Agency National Irrigation
Administration (NIA) Total Project Cost PhP
7,861.86 Million Financing Mode
Loan Implementation Period 2007-2009 Remarks
Already approved by the NEDA Board.
Location Pangasinan, Region I (service area)
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9. NORTH LUZON EXPRESSWAY EXTENSION PROJECT (NLEEP-I) Description Construction of an 84.5 km road 12 interchanges toll collection facilities 2 major bridges crossing Agno Bued Rivers totaling 2.85km, to support socio-economic activities in Regions I, III, CAR Metro Manila, help decongest traffic at McArthur Highway. Implementing Agency DPWH Total Project Cost PhP 19,350 Million Financing Mode GOP/BOT Implementation Period 2007-2011 Remarks Revised proposal is being prepared with scaled-down cost of ROW requirements proposed implementation arrangement thereof.
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10. QUIRINO HIGHWAY Description
Improvement/rehabilitation of the existing
91.192 km road, of which 69.537 km is Proposed
for improvement to PCCP application of Asphalt
Concrete (AC) overlay, the remaining 21.655 km
PCC pavement in good condition for
application of AC only. Implementing Agency
DPWH Total Project Cost PhP 1,621.88
Million Financing Mode Loan Implementation
Period 2007-2009 Remarks ICC-TB endorsed the
project on 5 December 2006 for ICC-CC approval.
EIRR 29.75 NPV _at_ 15 PhP
1.205 Million
Region 5
Camarines Norte
Camarines Sur
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Micro-Economic Reforms

• Transportation
• (Air and water services, including port
  services)
• Telecommunications
• Power

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Cost of Business

• POWER 10-25 of costs
• LOGISTICS 25-30 of costs
• TELECOMMUNICATIONS 5 of costs

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ADB on ImprovingPhilippine Competitiveness

• Infrastructure
• Ranks behind Malaysia and Thailand in ICT indices
• Power cost in RP highest compared with Thailand,
  China and Singapore

Comparative Indices and Rates
Country ICT Indices (2005) ICT Indices (2005) Commercial Electricity Rates (2005) US cents/KWh
Country WEF-Network Readiness EIU-IBM e-Readiness Commercial Electricity Rates (2005) US cents/KWh
Philippines Thailand China Singapore 70 34 50 2 51 44 11 13.6 7.2 8.2 10.6
Source NSCB and WESM, Senate
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ADB on ImprovingPhilippine Competitiveness

• Logistics
• Relative quick export time and customs clearance
  but highest cost to export among ASEAN and China

Trading Across Borders
Country Time for exports (days) Cost to export (US per container) Average days for customs clearance (air)
Philippines Thailand China Singapore 18 24 18 6 1,336 848 335 382 4 5 4 2
Source World Bank
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• End of Presentation

http//www.neda.gov.ph
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CIIP Investment Requirement by Sector
Total investments PhP 1,983.9 billion
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NG Investment Allocation of PhP429.7 B for
2006-2010 (by Super Region)
(2006 to 2010)
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Civil Aeronautics Board (CAB)

• Investment Effect
• Hotels, resorts, and other related businesses
• Competitiveness Effect
• Cost of Air Transport
• Total Economy
• Tourists Arrivals
• Employment Generation
• 1 million additional tourists means 1 million new
  jobs

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Philippine Ports Authority (PPA)

• Investment Effect
• May discourage investment by competitors
• Competitiveness Effect
• Cost of Cargo Handling
• Turnaround Time
• Total Economy
• Logistics Efficiency
• Export Cost

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Maritime Industry Authority (MARINA)

• Investment Effect
• Investment in Shipping
• Competitiveness Effect
• Cost of Sea Transport
• Total Economy
• Logistics Efficiency
• Inter-island Trading

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National Telecommunications Commission (NTC)

• Investment Effect
• Investment in Telecommunication Facilities
• Call Centers, BPOs
• Competitiveness Effect
• Cost of Telecommunications (reduced because of
  VOIP, but further reduction possible)
• Total Economy
• Business transaction costs and efficiency

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Energy Regulatory Commission (ERC)/EPIRA
Legislation

• Investment Effect
• High cost may discourage investments in machinery
• Competitiveness Effect
• Cost of electricity
• Total Economy
• Labor productivity
• Wages/workers income
• Household/consumer welfare

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Agencies Prone to Regulatory Capture

• Civil Aeronautics Board (CAB)
• Philippine Ports Authority (PPA)
• Maritime Industry Authority (MARINA)
• National Telecommunications Commission (NTC)
• Energy Regulatory Commission (ERC)