National Economic Development Authority (NEDA) Secretary Arsenio Balisacan said on Friday that the country's private construction industry had not yet fully recovered after the pandemic, with investors pointing to right-of-way issues and the high cost of electricity as the biggest reasons for holding out.
"Construction has not yet fully recovered since the Covid-19 pandemic struck with the share of private construction declining relative to public construction. We need to substantially improve the investment climate for the private sector," Balisacan said during the Build Better More Infrastructure Forum held at New Clark City in Tarlac.
The socioeconomic planning chief attributed the slowdown to several factors.
"First, we expected some investor hesitation owing to initial policy uncertainty brought about by the elections in 2022. On the other hand, lingering and persistent inflation, and a challenging external environment, particularly a strong dollar in the past two years, led to the elevated interest rates we see today," he said, adding they will continue to invite foreign investors in the infrastructure.
Other factors are right-of-way issues when acquiring private lands for public use, the high cost of electricity and the ease of doing business.
It is for this reason Balisacan is pushing for Congress to pass the Right-of-Way bill into law to ensure infrastructure products are completed on time with an emphasis on the provision concerning the valuation of property, seen as a game changer in resolving conflicts between the government and private owners.
"We have gone back to Congress regarding the Right-of-Way law and through the Ledac (Legislative Executive Development Advisory Council) they agreed to pass that law within the remaining term of this administration. So with that, I think many of the problems we are encountering in the quick implementation of infrastructure projects will be resolved," he said.
The NEDA chief expressed confidence that by 2025, private construction would spike back to its pre-Covid numbers, if not more.
"But with public investments coming in strongly, that will be the signal for the private sector to come in, too, especially that regional and global community investment climate is improving, notwithstanding these geopolitical tensions, because that's another factor that can matter," Balisacan said.
Source: Manila Times
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