TOLL road tariff increases and the reallocation of frequency for telecommunication companies are some of the issues that should be addressed immediately by the next administration, Maybank ATR Kim Eng said in its report over the weekend.
Maybank said these issues were not complex and could be acted upon immediately by the next president in order to deliver on the promise “to do better” than the Aquino administration.
“PPP [public-private partnership] projects, both prospective and those awarded, have been wrecked by controversy,” the bank said.
“Some of the more prominent examples are contractually agreed toll road rate hikes that have not been given when scheduled, water concession agreements being reinterpreted, and government deliverables on a hospital construction project unduly delayed to the extent that the private-sector proponent returned the project to the government,” it said.
Maybank said the next administration might go for “quick wins.” It said these delays and controversies were some of the issues being raised by presidential candidates opposing the ruling Liberal Party.
“Of course, the promise is they will do better. It is possible that to make a positive and quick impact, whoever is elected president will act on some of these issues immediately, especially those not complex, such as toll road tariff increases,” it said.
“Another could be the reallocation of frequency for telecoms companies, which will not only improve Internet speeds, but also raise potentially significant revenues for the government,” the bank said.
Maybank said public spending was less than the government’s target and infrastructure inadequacy had been a hot issue. It cited that road congestion had been causing motorists to be tied up for hours in traffic in the metropolis.
“There are many reasons why infrastructure improvement has lagged, but slow government spending is certainly one. The aim was to raise public infrastructure spending to 5 percent of GDP by 2016 from 1.8 percent in 2010, and to keep the overall budget deficit at 2 percent,” it said.
This has not been the case, the bank said. In 2014, infrastructure spending stood at only 2.2 percent of GDP and was 2.5 percent as of the first nine months of 2015. The 2-percent budget deficit target was met only in 2011.
“The Aquino government had an ambitious PPP program with a list of 54 projects when the program was announced in 2010. To date, 12 have been bid out as of end-2015, with only the first project awarded in 2011 completed in July 2015 (the four-km Manila-Cavite Expressway.
Economists said the government’s anemic fiscal expenditure was the main reason for the economy’s sluggish performance in the first quarter of 2015. First-quarter GDP grew 5 percent, slower than 5.6 percent in the same period a year ago.
Maybank added that smooth transitioning in the country’s leadership would be another step to strengthen the economy and maintain its status as one of the fastest-growing and bright spots in the region.