Address to the Confederation of Filipino Consulting Organizations (COFILCO)
Summit of Consulting Organizations
Richmonde Hotel Eastwood, Libis, Quezon City
21 October 2014
ROLANDO G. TUNGPALAN
NEDA Deputy Director – General for Investment Programming
Mr. Eric Cruz – COFILCO President, distinguished friends and colleagues from the government and the consulting industry, delegates, and guests, ladies and gentlemen, good afternoon. I am truly honored to serve as speaker for this year’s COFILCO summit of consulting organizations, and to talk to you about opportunities for expanding and deepening the partnership between COFILCO member firms and government.
As you are aware, the COFILCO is the Government Procurement Policy Board (GPPB)-accredited umbrella organization of Filipino consultants. In various ways, we have been partners in nation-building, and through this summit, we, in government, look forward to stronger partnerships as we embark on a journey to a better future for our country.
Today’s theme entitled “New Frontiers In Consultancy” is very timely and relevant considering the important role of the Filipino consulting industry in these exciting times – a 6.4 percent growth in the economy for the second quarter of 2014, a 12.7 percent increase in the private construction industry, credit rating upgrades and integration into the Association of Southeast Asian Nations (ASEAN) economy. With the international community taking notice of the great strides the country has achieved, this will be a great opportunity for all sectors, especially the local consulting industry, to take part in sustaining the growth trajectory of the country. With the ASEAN integration in 2015, the knowledge, expertise and ingenuity of Filipino consultants can provide quality and responsive advisory in support of the government’s strategy to accelerate infrastructure development that will, among others, increase inter-connectivity of urban centers and regional growth areas, ensure energy and water security, support agricultural production, improve access to and adequacy of basic services, promote good governance, improve environmental services and strengthen resilience to climate change and disasters.
As you may know, the 2011-2016 Philippine Development Plan (PDP) adopts a framework of inclusive growth, which means high and sustained growth that generates mass employment and reduces poverty. With good governance and anticorruption as the overarching theme of each and every intervention, the PDP midterm update realigns the government’s strategies to craft and implement concrete solutions to the country’s problems, and speed up the creation of high quality jobs, reduce poverty and achieve inclusive growth.
Along this line, the government intends to increase spending in public infrastructure from 2.2 percent of Gross Domestic Product (GDP) in 2012 to 5.1 percent of GDP by 2016 to enhance the quality, adequacy and accessibility of infrastructure facilities and services. The spending will be supplemented by private sector investments through public-private partnerships (PPP) and will be anchored on a conscious effort to increase efficiency based on the synchronized planning and budgeting processes.
In order to operationalize the approaches and achieve the 5.1 percent public infrastructure spending by 2016, the Revalidated Public Investment Program, or Revalidated PIP, identified priority programs and projects (PAPS), for the period 2013 to 2016, with a total investment target of Php 3.44 trillion. It gives emphasis to strategic core investment programs and projects, or strategic CIPS. Strategic CIPS are major priority programs and projects that are aligned and compliant with priorities set in the president’s social contract with the Filipino people, development objectives, and indicators in the results matrices – a set of tables detailing the outcome indicators and means of verifying the progress of attaining the Updated PDP goals. These also include new major capital programs and projects that are at least Php1 billion in total project cost.
For the period 2013-2016, there are 114 strategic CIPS with an estimated investment requirement amounting to Php 768.81 billion. Of the investment targets for strategic CIPS for 2013-2016, infrastructure development has the largest share, with 89 strategic CIPS worth Php 635.84 billion (82.70%). This is followed by social development with six strategic CIPS worth Php 53.10 billion (6.91%) and agriculture and fisheries with 10 strategic CIPS worth Php 39.08 billion (5.08%). Some of the big ticket projects that the government will be implementing within the next two to five years include the North-South Commuter Railway (formerly Manila-Malolos Commuter Line), improvement of major airports for Iloilo, Davao and Bacolod; and Davao Sasa port modernization, for the transport sector; the Bulacan Bulk Water Supply Project, new centennial water source – Kaliwa Dam, the Water District Development Sector Project and the National Sewerage and Septage Management Program; and the Clark Green City (CGC) to be implemented by the Bases Conversion and Development Authority (BCDA) which aims to convert and develop about 9,450 hectares of land into a self-sufficient and self-sustaining green and intelligent city situated within the Clark Special Economic Zone (CSEZ) at an estimated cost of Php 607.34 billion.
These projects are just examples and the consulting industry can access additional information on the list of these infrastructure development projects in the pip which is currently posted on the NEDA website.
And that these projects are components of a wider range of investment requirements as identified in specific roadmaps developed by the government aimed at rationalizing investments for quality and responsive programs and projects. The transport roadmap for Metro Manila and its environs, for instance, identifies 115 projects with an estimated investment requirement of Php 2.61 trillion aimed at reducing congestion and transport-related pollution emissions until 2030.
The Php 343.1 billion flood management master plan for Metro Manila and surrounding areas aims to provide a sustainable and effective flood risk management (FRM) in Metro Manila and surrounding areas until the year 2035.
Other roadmaps and master plans include the DPWH and Department of Tourism (DOT) convergence plan that will provide road access to designated priority tourism destinations under the National Tourism Development Plan (NTDP); and the survey on Mindanao Logistics Infrastructure (SMLIN) which aims, among others, to maximize the utilization of the Mindanao Container Terminal (MCT) to become the node of logistics and the center of economic development in Northern and Central Mindanao.
To further ensure the quality of programs and projects, under the General Appropriations Act (GAA) – fiscal year 2014, NEDA was tasked to administer an initial Php 400 million feasibility study fund (F/Sfund) which shall be used exclusively for the conduct of feasibility studies for non –PPP projects. Primarily, the fund aims to support proposed pre-investment activities or feasibility studies for projects/programs of the government. Currently, NEDA is in the process of procuring consultants for the conduct of four (4) feasibility studies for various projects with a total Approved Budget for the Contract (ABC) amounting to Php 202 million. For the remaining Php 198 million, there are 34 proposals in the pipeline, with a total ABC of Php1.98 billion, for processing by NEDA for the second batch of the NEDA Board Committee on Infrastructure (INFRACOM) approval.
On the other hand, the Project Development and Monitoring Fund (PDMF) has been established for the conduct of F/S for solicited PPP projects of the government.
The PDP also emphasizes the significance of balanced budget without compromising the realization of development goals and thrusts. Thus, the government is pursuing cost-efficient and cost-effective measures that support fiscal discipline and economic growth. One of the measures identified under the PDP is to subject major projects and programs to value engineering/value analysis (VE/VA) to ensure that projects/programs achieve full functionality at the most appropriate design and least project cost. NEDA, through its value engineering fund (VE fund), intends to procure consultants in order to pursue the government’s goal to optimize and to ensure value for money of infrastructure programs and projects.
Complementing the targets in terms of hard infrastructure outputs are reforms in policies and laws, including amendments to Republic Act No. 7718, otherwise known as the Build-Operate-and-Transfer (BOT) law, the Right-of-Way Act, the Anti-Trust Law and other regulatory reforms aimed at enhancing the environment for infrastructure investment.
Having presented the highlights of the PDP medium term update, the strategic CIPS, the roadmaps, the F/S fund, the VE fund and the PDMF, it is evident that there are, and there will be plenty of opportunities from pre-investment activities to project implementation for COFILCO’s member firms to take part in the development of our country and the improvement in the quality of lives of all Filipinos.
Meanwhile, the ASEAN integration in 2015 will expand further business opportunities for you, but as well as challenges. NEDA firmly believes in the capability, knowledge and ingenuity of the Filipino consultant to adapt to a competitive environment and take on even larger engagements. We encourage COFILCO to revisit its internal weaknesses and harness its strengths, to continue to develop, improve and broaden its knowledge and capabilities and meet international standards and be globally competitive. We at NEDA will continue to support programs that would strengthen our capacity to meet not only the demands of the local economy but as well as expand the Philippines’ role and participation in the regional and global markets.
Together, we can move in a unified direction that leads to a better Philippines for all Filipinos in this generation and the next.
Thank you and good day.
Mabuhay ang COFILCO!
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