BBB: Once more with feeling?

Believe it or not, the government claims it is planning to build its way out of the coronavirus economic downturn. If that means resurrecting the Build Build Build program, good luck!

The intention is a good one, even if I doubt the bureaucracy’s ability to execute. Vince Dizon, President Duterte’s adviser on key projects, said they are reviewing P4 trillion ($79.5 billion) worth of projects it earlier listed as priorities to include those with high and immediate economic impact. We have been here before, right, Ben Diokno? And where are we four years after? Ben, who coined Build Build Build, was so bullish he said they didn’t need to go PPP.

Funny, but last Monday, the projects proudly claimed by Duterte are all PPP: NLEx Harbor Link (MetroPacific); NLEx-SLEx Connector (MetroPac); Cavite-Laguna Expressway. (MetroPac); Skyway Stage 3 (San Miguel); R10 bridge (MetroPac); TPLEx (San Miguel); Subic Freeport Expressway (MetroPac). None of these projects were initiated by this administration.

My guess is that the congressmen behind the several trillion pesos infrastructure stimulus plan will focus more on less ambitious projects with significant pork barrel implications. Instead of airports and expressways, think farm-to-pocket roads (oops, farm-to-market daw), and agricultural stuff like irrigation.

I think they should prioritize the building of health centers in every municipality. We are the least ready among the ASEAN 6 to effectively respond to a pandemic. Our lack of a good network of health centers made fighting this epidemic more challenging, aside from the bad leadership at the national level.

In any case, the infrastructure push won’t be enough to prevent a “meaningful contraction” this year, said Bank of the Philippine Islands lead economist Emilio Neri in an AlJazeera article. “The likelihood of returning to full capacity in the second half is quite low at this point.”

A paper prepared by a group of Ateneo economists has also urged government to shelve some of its infrastructure projects, notably those already questioned by experts to be potential white elephants like the Clark-Subic Railway and the Mindanao Railway.

Actually, the Ateneo economists need not worry. With two years to go, these two projects are going nowhere. Both are supposed to be funded by China, but China doesn’t seem enthusiastic, Duterte’s embarrassing protestations of affections to Xi Jinping notwithstanding.

The Ateneans also urged that projects vulnerable to more pessimistic scenarios in the post-COVID environment ought to be dropped. The list includes proposed railway, airport, and tourism-related projects.

They may be right that “a failure to stamp out the disease will mean that air travel–including for tourism purposes – will be dampened for years on end, which will undermine the returns of projects aimed at supporting the operations of these sectors.”

But they may be wrong about some airport projects, because like the Bulacan airport it will take five years to complete. Hopefully by then, things would have returned to normal.

They are also worried about the economic prospects of mass commuter railways, which comprise several of the most expensive projects in the BBB portfolio. Projects already started should be completed. But they are probably right about the subway.

They are worried “tremendous subsidies may be required to keep such railways commercially afloat”. That’s very true about the subway. But some amount of subsidy of public transportation may be required to fix our system and start moving people instead of cars on our roads.

Indeed, the same Ateneo paper called for public subsidy with government contracting buses and jeepneys to fix routes and eliminate the “boundary” system.

They are concerned that the subway with its big debt payments “could ‘crowd out’ domestic public resources which could otherwise be allocated for pandemic-related investments.”

As for the NCR airport projects, the Ateneans are right to suggest “it is advisable to defer the envisioned expansion of, at least, the Sangley airport project.”

But the rehabilitation of NAIA and the new Bulacan airport will not have any impact on government finances, thanks to Finance Secretary Sonny Dominguez’s efforts to make sure of this.

My good friend, Manny Gonzalez, a former investment banker and now a tourism entrepreneur, has the best view I have seen lately on all of these developments. Here is what he posted in reaction to one of my Facebook posts:

“Par for the course - an inability to do arithmetic or think clearly.

“In the 1930s, the US was able to spend its way out of the depression by embarking on major infrastructure projects like the Hoover Dam. The projects created demand for American labor, American heavy machinery, and American raw materials, and yielded a useful product, electricity. This made sense.

“When the Philippines proposes to spend $35 billion on a prestige one-track subway for Manila - equal to 100 percent of our current national public debt - almost all of that will go to foreign heavy equipment and engineering firms. Only a tiny fraction will be for Filipino labor or other inputs.

“And the output will not be something useful, but a white elephant that will cost $ 40,000 in capital per daily passenger served. See my PhilSTAR article on the Arithmetic Behind the Metro Manila Subway.

“This does not make sense. We would be far better off giving people $5,000 each to relocate to Mindanao - benefiting them, Mindanao, and those who remain in a Manila with lower population.

“We always ask ‘Why can’t we be like Thailand? Vietnam? Indonesia?’ The answer is we refuse to do the obvious, that anyone with an IQ of 80 could understand.

“Jakarta is sinking, so the Indonesians make plans to move their capital. Metro Manila is sinking almost as fast, so we plan a subway, three airports, and ever more expressways.

“We are stupid and hardheaded. That’s the bottom line. I predict that almost every penny spent on Build Build Build will not only be a total waste, but will keep costing us more losses annually to cover up the wasted investment.”

Thanks, Manny, for telling it as it is… big warts and all. But I doubt that will keep our officials from continuing to be stupid and hardheaded.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco