The Philippines can learn a lot from the way China has developed its infrastructure, a World Bank official said on Friday.
“China’s approach … could be emulated in the Philippines during the implementation of the government’s ‘Build Build Build’ program,” World Bank country director Mara Warwick said during The Manila Times 6th Business Forum at the Marriott Hotel in Pasay City.
China, she said, placed a lot of emphasis on developing a system for infrastructure delivery over the past three decades.
Strategic planning that is coordinated at the national, regional and local levels, said Warwick, is a particular strength.
“Planning starts at the national level, with a five-year planning system that defines national development goals and sets strategic national targets in a similar way as the Philippines Development Plan does here,” she said.
A second driver of China’s success in infrastructure, meanwhile, is the decentralization — that began in the early ‘80s — of responsibility and decision-making to local governments.
Decentralization has encouraged local experimentation, competition for resources and economic development opportunities, and motivated local initiatives through a performance system that rewards local leaders’ success.
“Of course, the challenges of China’s system are well known, including its over-reliance on land financing and debt and the absence of a property tax, and reforms are underway to address these issues,” Warwick noted.
While a property tax system is in place in the Philippines, the World Bank representative said that this was outdated and under-valued.
She added that few local governments had the sufficient fiscal capacity to independently undertake major infrastructure projects, making them reliant on the national government for transfers and dependent on the annual budgeting cycle.
An overhaul — both in the division of responsibilities for infrastructure provision and the system to finance projects — could provide a positive boost to the Philippines’ infrastructure program.
Local capacity, said Warwick, is a key constraint in the Philippines and was also an issue in China.
To address this, local governments in China invested in developing their own planning and implementation capacities, she said, supported by regional and local organizations.
“Development partners have also played an important role over a long period of time, as pilot projects were chosen to test new ideas and develop capacity at the local level, and a ‘learning by doing’ approach through project preparation and implementation has strengthened capacity in planning, engineering, procurement, and environmental and social safeguards,” Warwick noted.
The “Build Build Build” program was the subject of Friday’s forum, which carried the theme “Philippines 2021: Toward the Golden Age of Infrastructure.