Overview
The Philippines lags many neighboring countries in infrastructure development and is notorious for challenging traffic conditions and long commutes, under capacity in international airports, and port congestion.
President Marcos Jr. stated that he will continue the Build, Build, Build program launched by the Duterte Administration in 2017 to address the country’s infrastructure challenges. The program’s list of flagship projects includes 112 projects in the transport and mobility, urban development, water resources, ICT, health, and power and energy sectors valued at approximately $88 billion. There are 76 transport and mobility projects on the list worth about $81 billion, almost half of which are road, highway, expressway, and bridge projects. Rail, airport, bus rapid transit, subway, and port projects are other projects. The complete list of flagship projects can be found at Infrastructure Flagship Projects - National Economic and Development Authority (neda.gov.ph).
The Duterte Administration favored projects linked to tied aid loans because they are offered at concessional rates with long repayment periods. Japan emerged as a leader in this area, quickly claiming the big-ticket rail projects. The Asian Development Bank (ADB), World Bank, and Korea were the Philippines’ other sources of concessional loans for the flagship projects.
Out of the 76 transport and mobility projects, 35 are being or will be funded purely by development aid, with only 12 being financed by government funds. There are 24 Public-Private Partnership (PPP) projects, 20 of which are unsolicited proposals.
Only 10% of the transport and mobility projects were completed as of June 2022, so there are still many opportunities for U.S. exporters in the transportation infrastructure sector.
U.S. firms are encouraged to identify projects of interest, research their status, and determine how to engage and assess risks. Unsolicited PPP proposals, mostly airport projects, are still being reviewed and revised by the project proponents due to the COVID-19 pandemic. The Marcos Administration is expected to add new projects to the list and remove those they do not think should be prioritized. Many projects on the flagship list are not yet in the construction stage, so there is a possibility that they will not move forward.
Leading Subsectors
Rail: Projects that initially garnered high U.S. interest include the $3 billion North-South Commuter Railway Project (Philippine National Railway [PNR] North 1), the $12 billion North-South Commuter Railway Extension (PNR North 2 South Commuter) Project, and the $7 billion Metro Manila Subway Project Phase 1. Japan International Cooperation Agency (JICA) is funding the subway project, while ADB and JICA are funding the rail projects. U.S. firms cannot be the main contractor on record for JICA-funded projects, but the project size allows for subcontracting and supply opportunities.
Airport: The major airport project in the Philippines is the $14 billion New Manila International Airport in Bulacan, a greenfield PPP project with a design capacity of up to 200 million passengers annually and plans for four parallel runways.
Market Opportunities
A range of products and services are needed to complete the transportation infrastructure projects, including building products, construction equipment, electrical and mechanical equipment, IT-related systems, and consulting services. Information on the contract packages for the rail projects and the winning bidders is available on the Department of Transportation website.
U.S. firms can participate in transportation infrastructure projects by:
- Serving as consultants/subconsultants, contractors/subcontractors, or goods suppliers for Official Development Assistance-funded and/or PPP projects,
- Bidding on Philippine Government project tenders,
- Partnering with a local firm for any of the above.
Resources
- National Economic and Development Authority
- Department of Public Works and Highways
- Department of Transportation
- Public-Private Partnership Center
Contact Information
Bebe Montesines, Commercial Specialist, U.S. Commercial Service Philippines
Email: Bebe.Montesines@trade.gov
For Asian Development Bank (ADB) funded projects:
Hanes Roberts, Senior Commercial Officer, U.S. Commercial Service Liaison to ADB
Email: Hanes.Roberts@trade.gov