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Capital Markets

Philippines fumbles its infrastructure

Often touted as having the region’s best growth prospects, the nation is struggling to make sure those hopes come true and aren’t dashed by poor foundations.

philippines wall big

Power outages are so common in Mindanao, the Philippines second-largest island, that consumers, frustrated at paying some of the highest electricity prices in the region, have taken to social media to dub the country’s energy secretary the ‘secretary of darkness’. 

For an economy anointed by many as having southeast Asia’s best growth prospects, it is a vivid reminder of the correlation between quality of infrastructure and economic prosperity.   Infrastructure matters, and the problems are not confined to the Philippines. According to the Asian Development Bank, the 10 members of Asean (Association of Southeast Asian Nations) are facing an infrastructure crisis that if left unchecked could stymie their transition from low-cost to high-value economies. 

Asean has less than 11 kilometres of roads and 0.27 kilometres of rail per 1,000 people compared to 200 kilometres of roads and more than five kilometres of rail in OECD countries. Some 86% of Asean’s population has access to clean water, compared with 99.6% in the OECD.

The ADB estimates infrastructure projects in Asean need approximately $60 billion of investment a year to 2020 in addition to projects with cross-border impacts such as airports, seaports and roads to borders.


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