By Caesar Vallejos
Eagle News Service
The gathering of the captains and movers of the construction industry, government policy makers, and foreign and domestic stakeholders at the 3rd Philippine Construction Industry Congress focused on relevant issues vital to the growth and sustainability of the Philippine construction industry.
Held last November 8, 2018 at the Conrad Hotel Manila, key topics included the liberalization of the construction industry, government infrastructure initiatives, infrastructure opportunities and delivery models, training and education, and ease of doing business.
The proceedings will serve as inputs to the Philippine Construction Industry Roadmap, the blueprint of the construction industry’s progress.
“Everyone is openly saying their opinions and having their stance. We were able to come closer and be able to work harder for the infrastructure projects, both the existing ones and the future projects,” Lorenz Ziller, Executive Director of the Italian Chamber of Commerce in the Philippines, Inc (ICCPI) said.
Ziller stressed that “the construction business is one of the key sectors for our chamber because we have a lot of Italian contractors which can bring know-how and technology into the country and work together with Filipino partners on several infrastructure projects.”
Construction liberalization
“In general, everyone agrees that liberalization is a good thing but it has to be in a regulatory framework where reciprocity is guaranteed,” Ziller said.
On liberalization, the Department of Trade and Industry (DTI) Secretary Ramon T. Lopez in his key keynote speech said “you have to tell us up to how far we can liberalize the industry. In many sectors, we have already liberalized.”
“You are part of the Foreign Investment Negative List. But the mindset right now is to liberalize as many sectors that can promote healthy competition for all industries. Please tell us how we can work together to liberalize this industry. Again, with the necessary protection for the small guys. But for the big guys, especially with possible technology enhancement and partnerships, these liberalization efforts will really take our country to the next level,” he said.
The DTI Secretary noted that that “among the four sub-sectors of Industry, construction posted the highest growth rate at 11.5%, more than doubled its 2017 growth of 5.3%.”
“And this is just the beginning. We have been seeing double digit growth on many sectors,” he added, citing cement and steel demand that have been posting double digit growth in the past 5 years.
“This suggests that we are on the path to an economic breakout. This is a sustainable growth which is just starting. Other countries have been saying that when they experienced this growth in the cement and steel sectors, they never looked back,” the DTI Secretary explained.
Construction output has accounted for nearly 6% of GDP on average over the 2010-2017 period. “The budget we are allotting for infrastructure is now 5-7% of the GDP, which used to be only at around 2-3%. We are really on a catch up mode,” Lopez said.
Lopez attributed the Increase in construction investment to high consumer confidence, modest inflation and interest rates, and improving labor market conditions.
“The construction industry is in the limelight following the government’s aggressive commitment to approve and implement more big-ticket infrastructure programs,” he noted.
The share of the construction industry to total employment of the country is 9.3% in the first semester of 2018. It continues to provide job opportunities, employing a total of 3.826 million workers, up by 13.2% from the same period in 2017. The National Economic and Development Authority (NEDA) expects around 820,000 jobs to be generated with a number of infrastructure projects breaking ground for the year 2018.
Change in mindset
Speaking on the panel “Accelerating Nationwide Infrastructure Build-up” Magsaysay Inc. President and CEO Doris Magsaysay-Ho said, “we need an integrated land, air and sea transport system that allows mobility and access to markets and we need a strategic plan to identify what sectors we can compete in, in agriculture and manufacturing, a clear focus on building our exports trade volume so we can have jobs for those at the bottom of the pyramid.”
She emphasized the need for “strategies and a clear determination to compete regionally and globally in a commitment to policies that transcend administrations.”
“This is the only way that the infrastructure that we build will prepare for the ambitious future state rather than filling the gaps from piece meal planning of the past,” Magsaysay-Ho said.
She also noted that the Philippines competes with countries that have very long term plans and strategic goals.
“I think that is our problem, we focus on ‘how’, without putting an effort to really decide on ‘where to’ and what we are trying to achieve,” she stressed. Magsaysay-Ho said that there is a need to focus on a change in mind-set.
The event also featured panels on Opportunities and Infrastructure Delivery Models; Training & Education: The Future of Construction Jobs; and What is holding up our Infra Projects.
Construction and other Italian interests
The ICCPI Executive Director said that “we see that companies with Italian interests have already invested hundreds of millions of dollars into the Philippines and we hope that this trend will continue.”
Aside from construction, Ziller said that Italian businesses are also eyeing for the country’s agriculture and tourism industries.
“Italians are very good in building machinery in agriculture for food processing and also on cold storage facilities. Apart from that, Italian hospitality is very well renowned so I can see that Italian tourism interests can come in and help develop the torism sector,” Ziller said.
Ziller also included the sector in education a prospect for cooperation. “We have a program that we will launch next year which will touch several Italian education programs in cooperation with Italian colleges and universities and and we hope to set this up in the Philippines in order to give an international flair to the existing education framework.
Aside from the the Italian Chamber of Commerce in the Philippines, Inc., the 3rd Philippine Construction Industry Congress was also organized in partnership with Department of Trade and Industry (DTI), Construction Industry Authority of the Philippines (CIAP), and the Philippine Constructors Association (PCA) and with the participation of PhilConstruct Events, Exhibitions, & Conferences Corp. (PEEC), Infrastructure and Construction Focus Group (ICFG), and EU-Philippine Business Network (EPBN).