During the launch of the financial lending institution’s economic review update for the Asia-Pacific region, Vera Songwe, economist for the World Bank Philippines, said the country should allocate more funds for infrastructure developments to be competitive with its Asian neighbors.

"The Philippines is not keeping at pace with the rest of the region in terms of infrastructure," said Songwe.

Songwe said that while other countries in the region invest an average of 5 percent of their gross domestic product on investments on infrastructure, the Philippines spends only around 2.3 to 2.5 percent.

"The Philippines needs to do more," she said.

Quality also needs improvement

Songwe added that aside from investing more on the construction of new roads, railways, airports and ports, there is also a need to improve the deteriorating quality of some infrastructures like roads.

Farm-to-market roads, Songwe added, should also be built to attract more investments and to improve connectivity between urban and rural areas.

An official from the National Anti-Poverty Commission last month cited the lack of good road networks and farm-to-market roads in the CARAGA region in Mindanao as among the causes of the high incidence of poverty in the region. (Click here to read "Mindanao Still Poorest Island in Nearly A Decade")

CARAGA, composed of the provinces of newly-created province of Dinagat Island, Agusan del Norte, Agusan del Sur, Surigao del Norte, and Surigao del Sur, posted the second-highest poverty incidence among the Philippines’ 17 regions with 45.5 percent of the families in CARAGA classified as poor.

The need to invest on infrastructure was also noted by the Asian Development Bank in its latest country diagnostic study for the Philippines.

ADB prescriptions

In its study, "Philippines: Critical Development Constraints," the ADB identified inadequacies in infrastructure as among the critical constraint to development and growth, along with tight fiscal situation, weak investor confidence and inability to solve market failures.

The ADB study said that the Philippines has invested less on infrastructure than most of its regional neighbors. Its costs of transportation and power rates in the country have also remained higher than other Southeast Asian countries.

The study noted that it costs 16-51% more to export a 20-foot container from the Philippines than from China, Singapore or Thailand.

Low level of investments in and poor conditions of infrastructure are blamed for the high cost of doing business in the country. They have a negative effect on the competitiveness of the Philippines as an investment destination.

A 2007 study by the World Bank and the Turku School of Economics ranked the Philippines 86th out of 150 countries in terms of adequacy of infrastructure.

Meanwhile, another World Bank study in 2005, "Philippines: Meeting Infrastructure Challenges," showed that half of the country’s road network was in poor and bad condition and that congestion in the main roads is costing the country around P180 billion a year. (abs-cbnNEWS.com/Newsbreak)

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