Philippines’ infrastructure leap: Bridging islands, cutting time, 9 things going right
From political rifts to insurgencies, the nation transforms its turmoil into opportunities
Manila: In the Philippines, drama courses through its veins — spilling into its soap opera-like politics and centuries-old struggles.
Its vibrant 7,641 islands thrive on stories of passion and conflict, reform, reconciliation and resilience. It faces several interconnected challenges: these include environmental, political, and socio-economic issues.
Generational poverty and deep-seated rivalries paint a nation caught between spectacle and survival. Yet, amid this turbulence, something extraordinary is happening.
Economic dynamism now pulses through the very heart of the nation once overshadowed by its neighbours. High-profile political breakups and simmering insurgencies still make headlines, but beneath the surface lies a country brimming with resilience and ingenuity.
These are the nine things going right in this archipelago:
#1. Strategic reforms
The Philippines has undergone a series of policy reforms. For example, the CREATE MORE Act, signed on November 12, introduces key updates to boost investments.
It enhances tax incentives, reduces the corporate income tax rate for eligible businesses from 25 per cent to 20 per cent, expands deductions, such as a 50 per cent tax deduction for tourism-related reinvestments.
This is aimed to cut bureaucratic red tape by simplifying processes for a broader range of investors. It also allows registered businesses to have up to 50 per cent of their workforce in remote work arrangements without losing tax incentives.
Moreover, recent amendments to the Philippines' Public Services Act (PSA) introduced key changes, allowing up to 100 per cent foreign ownership in industries such as telecommunications, airlines, railways, and shipping.
This is expected to boost investments, enhance competition, and improve services in these vital sectors.
#2. Infrastructure build-up
The Philippines is making significant stride in infrastructure, including massive bridge-building projects, expanded road networks, and modernized airports.
For example, the Luzon Spine Expressway Network aims to cut travel time from Ilocos to Bicol from 20 hours to just 9 – this 1,200-km expressway network will enhance connectivity across Luzon.
The Bataan-Cavite Interlink Bridge, a 32-km, four-lane bridge, will connect Bataan and Cavite provinces, significantly cutting travel time across Manila Bay from five hours to less than an hour. There's a greater push for inter-island connectivity.
North-South Commuter Railway, with over 1,000 km of railway development in progress, includes the southern leg connecting Pampanga to Laguna. Once completed, it will halve the travel time from four hours to two, boosting urban and economic mobility.
Six tunnel boring machines (which will eventually be ramped up to 19 TBMs) are currently boring through Manila's undergound for its $8.3-billion subway network. Under the "Build, Better, More" programme, total infrastructure outlays have been allocated with Php1.510 trillion in the enacted 2024 budget. This is Php180 million higher than in 2023.
These projects, while requiring time and considerable investment, are creating a conducive environment for growth. Enhanced infrastructure not only improves the daily lives of residents and visitors but also attracts both domestic and foreign investments in essential public works, ultimately boosting productivity.
#3. Public-Private Partnerships (PPP) law updates
Recent updates to the PPP law have provided clearer guidelines and improved conditions for private sector involvement in public infrastructure projects.
By streamlining regulations, the law makes it easier for businesses to participate in projects that benefit the public, from transport to energy, and ensures the effective utilisation of private funding for public good. This has led to a surge in high-quality infrastructure projects that might otherwise have faced funding gaps.
#3. Executive Order (EO) 59:
EO 59, signed by President Ferdinand Marcos Jr on April 30, 2024, seeks to eliminate unnecessary delays in the issuance of licenses, permits, and other regulatory clearances for critical infrastructure projects.
With a focus on speeding up bureaucratic processes, this order helps ensure that flagship infrastructure projects are completed on time, without unnecessary setbacks. This is crucial for maintaining momentum in development and sustaining investor confidence in long-term projects.
Right-of-way (ROW) issues have stalled projects of national importance in the past. This order could help alleviate such snags.
#4. Ramping up renewables
The Philippines has been making remarkable strides in renewable energy, particularly through solar, wind, and battery (SWB) storage projects. The country is building 20 more dams, and five pumped-storage hydroelectric power plants are in the permitting stages.
The country is also a fast-rising Asean star in solar-wind-battery integration. In September, a Danish firm announced a $3 billion offshore wind power project in San Miguel Bay in Camarines Sur with a production capacity of the 1-gigawatt (GW), enough to power more than 1 million Filipino households (at an average of 300 kwh per household per month).
This is driven by the SWB convergence, an 82 per cent drop in photovoltaic cost since 2010 and the further 46 per cent decline in wind power since 2010, alongside the 87 per cent reduction in battery prices since 2010, according to Rethink X.
These clean energy initiatives not only diversify the country’s energy sources but also drive sustainable growth, reducing dependency on imported fuel, and creating green jobs.
#5. Rise in dollar remittances
A consistent rise in remittances from Overseas Filipino Workers (OFWs) has provided a significant economic cushion for the Philippines. Cash remittances they sent to the Philippines by hit $33.5 billion in 2023, as per Statista.
From January to October 2024, remittances from overseas OFWs increased by 2.9 per cent to $22.22 billion, compared to $21.58 billion in the same period in 2023. The US, Saudi Arabia, Singapore, and the UAE were the main contributors to the increase. The US accounted for the largest share of remittances, at 41.3 per cent.
This influx of dollars bolsters consumption, supports local businesses, and helps stabilise the economy by injecting liquidity into the market.
#7. Manufacturing boost
The Philippines has seen a boost in manufacturing and job creation. Corporate tax cuts and incentives for local businesses are helping to create a more conducive environment for industrial growth.
The Philippines' electronics manufacturing industry is gaining global recognition, driven by its skilled workforce and strategic location. As Southeast Asia's largest exporter of electronics, the sector accounts for over 60 per cent of the country's total exports.
Key players like Texas Instruments, Samsung, IMI,
The Philippines' electronics manufacturing industry is gaining global recognition, driven by its skilled workforce and strategic location. As Southeast Asia's largest exporter of electronics, the sector accounts for over 60% of the country's total exports. Key players like Texas Instruments, Samsung, and Analog Devices, Hitachi, Fujitsu, ONE Semiconductor, etc. have established operations, producing semiconductors, components, and consumer electronics.
The government’s push for tax incentives and public-private partnerships has enhanced its appeal to investors. Moreover, growing demand for electric vehicles, 5G technology, and renewable energy solutions has spurred innovation. This robust industry not only bolsters the economy but also positions the Philippines as a hub for tech and chips manufacturing.
As a result, there has been an uptick in local production, with more Filipinos finding stable employment and contributing to the overall economic health.
#8. Diplomacy
The Philippines has made significant efforts to strengthen its diplomatic ties with global partners, particularly through trade agreements, Comprehensive Economic Partnership Agreement (CEPA), foreign direct investment (FDI), and international collaboration.
Despite overlapping territorial claims that sometimes lead to highly-publicised skirmishes, cooler heads have prevailed amid heightened diplomatic efforts.
By reinforcing existing defence and economic alliances and building new ones, the country has positioned itself as an attractive investment hub, leading to greater economic cooperation with neighbours and global powers.
Enhanced diplomatic relations foster an environment of stability and open markets, essential for driving sustainable economic growth.
#9. Insurgency, separatism
These are the big elephants in the room. Communist and Moro separatist insurgencies are pivotal challenges. Wealth in minerals — nickel, gold, copper, oil, gas, and more — is tightly controlled by powerful families and corporations, exacerbating inequality.
Poverty, at 15.5 per cent (as per 2023 Philippine Statistics Authority data), means the poor have to queue up for doles, controlled by politicians, for any issue – medical, education, burial, jobs.
This fuels patronage and rustration – pushing millions of Filipinos to work in faraway lands, where they feel more valued. It has also heightened grievances – propelling armed groups like the New People’s Army (NPA), whose decades-long insurgency has claimed 40,000 lives and remains Asia’s longest-running communist-inspired conflict.
Between 1972 to 1980, at least an estimated 120,000 people were killed in the Moro conflict, which also displaced one million people internally and caused more than 100,000 Philippine Muslims to flee to Malaysia. In the siege of Marawi, there were 978 militants reportedly killed, 168 government forces killed, and over 1,400 state troopers wounded.
In 2023, at least 220 people were killed in clashes between the sides in the conflict.
Recent peace efforts, however, offer glimmers of hope. The creation of the Bangsamoro Autonomous Region (BARMM) has eased separatist tensions, paving the way for energy projects in resource-rich areas like Cotabato and Sulu. Fresh oil and gas exploration sites have been identified in Cebu, while hydrogen exploration in Luzon hints at future prosperity.
Clashes between the NPA and the military continue, with 128 skirmishes reported in 2024 alone.
Resolving conflicts between the Philippine government and extremist ideologies demands significant effort and strategic compromises. Failures in these efforts risk further hampering development, and exacerbating the root socio-political issues that fuel unrest. Addressing both terrorism and the systemic inequalities that drive extremism is a critical and complex challenge.
Sustained peace efforts and equitable resource management can significantly help the nation unlock its full potential and attract vital investment for long-term growth.
Takeaways
- Taken together, policy reforms and renewed push for infrastructure buildup could bolster the economy and improve quality of life. IMF projects a 6 per cent economic growth in 2024, while the World Bank forecasts a growth average of 5.9 per cent for the years 2024 to 2026.
- Stronger domestic demand, trade, OFW remittances and robust service-sector expansion are key drivers, while inflation stabilises within the 2-4% target range set by the Bangko Sentral ng Pilipinas, thus supporting further private investments.
- Improvements in both human and physical capital, energy and infrastructure could foster more growth, further elevating the nation’s economy.
- Reforms bring renewal, creating a more dynamic ecosystem, setting the Philippines on a clearer path to break from its difficult past.
- The road ahead remains fraught with challenges. Yet it shines as one of the fastest-growing economies in East Asia, proving that resilience and creativity often emerge from its dramatic flair.