‘Build, Build, Build’ (BBB): Does it build a road to economic growth?

I. BACKGROUND
The ‘Build, Build, Build’ or ‘BBB’ is a government infrastructure program that envisions a
“Golden Age of Infrastructure” and manifests a growing and sustainable Philippine economy. It aims to
generate more jobs to reduce unemployment rate, lessen traffic congestion through better roads and
transportation, attract more investors, and to address poverty.
The ‘Dutertenomics’ is an initiative of the Duterte administration to boost its economic policies to
yield economic growth, and under which is the ‘Build, Build, Build’ program. It is based on the framework
of Presidential Development Plan’s three pillars – enhancing the social fabric, inequality-reducing
transformation, and increasing growth potential. Enhancing the social fabric includes strengthening
efficiency, transparency, and participation by establishing better and effective process in implementing the
program; the projects under the infrastructure program signify the inequality-reducing transformation; and
the technology and innovation in the BBB are believed to increase the growth potential of our economy.
The infrastructure program is also in adherence to the United Nation’s 2030 Agenda and aspires to achieve
the 17 Sustainable Development Goals, one of which is the ‘Industry, Innovation, and Infrastructure’.
Several infrastructure agencies are coordinating in order to actualize the program, namely: National
Economic and Development Authority (NEDA), Department of Public Works and Highways (DPWH),
Department of Transportation (DOTr), and Bases Conversion and Development Authority (BCDA). The
BBB is also in partnership with the Department of Budget and Management (DBM) as well as with
Department of Finance (DOF). These agencies are responsible in the implementation of the projects under
the infrastructure program.
The infrastructure program was set to undertake 75 Infrastructure Flagship Projects (IFP) in 2017
during its launch and was revised to 100 IFPs in 2019. The IFPs are divided into the following groups:
transport and mobility, information and communications technology or ICT, power and energy, urban
development and redevelopment including disaster risk mitigation, and water resources. There are also
three sources of financing to fund the IFPs under the program – the General Appropriations Act (GAA),
official development assistance (ODA), and Public-Private Partnership (PPP).
One of the projects of the BBB that is yet to be fully implemented is the Metro Cebu Expressway,
spearheaded by the DPWH. This project is anticipated to create a highway and tunnel divided into three
segments: (1) Talisay-Cebu City-Mandaue; (2) Consolacion-Liloan-Compostela-Danao; and (3) Naga-
Minglanilla. The budget for the project is P18,016,000,000.000 financed by the GAA. It began on 8 January
2018 and to be completed by 30 December 2022.
 And so far, the most noticeable accomplishment of the BBB in Cebu is the new passenger terminal
building or the Terminal 2 in Mactan-Cebu International Airport. The Terminal 2 was launched on 30 June
2018 and was completed on 31 August 2019. It caters to international flights, and it increased the annual
passenger capacity of the airport to 12.2 million. This project is under the DOTr and had a projected cost
of P17.52 billion and was funded through PPP means.
The Metro Cebu Expressway and the Terminal 2 in Mactan-Cebu International Airport are just two
of the estimated 20,000 infrastructure projects to be implemented – the IFPs are priority projects. These
projects are deemed as sustainable means of improving the lives of the Filipinos. However, currently, only
34% of the projects were completed and there are only 2 years left in Duterte’s term, therefore we must
monitor the progress of the remaining projects.
The goals and ideals of the BBB is ambitious but incites anticipation. In order to understand better
the infrastructure program and its effect to the economy, it is necessary for us to look into its nature as a
fiscal policy, which will be discussed in this paper. Will the ‘Build, Build, Build’ program really bring the
economy towards growth as promised?
II. INTRODUCTION
‘Build, Build, Build’ is expected to accelerate government spending by investing in infrastructure.
The government aims to attain 7 percent of gross domestic product (GDP) by the end of President’s term
through the program as a response to our country’s infrastructure backlog. The cost of the infrastructure
program was supposedly around 8 trillion to 9 trillion but was reduced to 4.4 trillion in the revised BBB, as
of June 2020. Around 162.2 billion will be allocated from the national budget to fund 20 IFPs; official
development assistance to finance 54 of the flagship projects (2.6 trillion) through foreign loans and grants;
and an estimated cost of 1.8 trillion for 32 IFPs will be funded through the means of Public-Private
Partnership (Mira, 2020).
Apart from that, BBB is a factor in the soaring national government debt due to foreign loans to
finance most of its IFPs. Asian Development Bank, one of the sources of ODA, loaned $3.3 billion to the
government – which is by far the highest – to fund its infrastructure and social projects (de Vera, 2020).
Philippine’s debt rose to P7.7 trillion in 2019 from the P6.6 trillion in 2017, but the debt-to-GDP has been
declining from 52.4% at the start of the decade to 39.6% in 2019 (Ofreneo, 2020).
However, Philippines has been experiencing economic recession due to the COVID-19 pandemic,
especially when businesses were forced to close in compliance with the community quarantine protocol.
And in the first quarter of 2020 alone, the country’s GDP reduced by 0.2% (Philippine Statistics Authority,
2020). The pandemic also caused the ballooning debt of the country and led to the realignment of budget,
making it ‘flexible’ to counter the crises we are facing. With this, the budget for infrastructure was reduced,
and some of the main implementing agencies of the BBB program experienced budget cuts to prioritize
COVID-19 response, but this could also further delay the implementation of the projects. With 2 years left
in Duterte’s term, 34 out of the 100 IFPs are being implemented, and an estimation of 56% of the projects
will be completed at the end of his term (Gita-Carlos, 2020).
Despite this, the BBB program is expected to fuel the economy’s recovery due to its multiplier
effect and it can also generate around 140,000 to 220,000 jobs. Hence, much of the 2021 proposed budget
is allocated to public infrastructure – amounting to P1 trillion. There will also be more projects to be
implemented in 2021 that include more health and ICT infrastructure to remedy the offshoot of the
pandemic and to prepare the country for other health crises (Merez, 2020).
The ‘Build, Build, Build’ is an ambitious program that set forth 100 infrastructure flagship projects
that will usher the country to a “Golden Age of Infrastructure” or economic growth. However, the COVID-
19 pandemic led the economy to its recession, and it has also put a temporary stop to the infrastructure
program. But the government has high hopes for the BBB to drive the country to economic recovery.
II. ANALYSIS
The Keynesian economics is, I believe, the central theory in the implementation of the ‘Build,
Build, Build’ program. This theory claims that consumer demand stimulates the economy and that the
government should focus on increasing this demand. For this reason, expansionary fiscal policies are crucial
in an economy in recession as it increases government spending or to effect tax cuts – or both.
The Comprehensive Tax Reform Program (CTRP) is said to be essential for the BBB as it acts as
a counterweight to the increasing budget deficit (Department of Finance, 2017). The government reformed
and simplified the tax system in the country to ensure a sustainable means of raising revenue, which is a
source of funding for the government’s programs or projects, especially on infrastructure. These two
expansionary fiscal policies that increase government spending (i.e. BBB Program) and cut personal taxes
(i.e. CTRP by reducing personal and corporate income tax) are strategies to catalyze economic growth.
Theoretically, following the nature of an expansionary fiscal policy implemented through
discretionary means as it changes the level of government spending, the ‘Build, Build, Build’ program
increases the aggregate demand in the short run while the aggregate supply is stationary. This indicates a
change or increase in output while the price level is held at constant (Figure 1).

Figure 1. Aggregate Demand – Aggregate Supply: Short Run

E0 E1
AS

AD1

AD0

Output

In Figure 1, the aggregate supply is flat, and the aggregate supply moves to the right (from AD0 to
AD1). The intersection also moves horizontally from E0 to E1 which increases the output while the price
level is fixed. Similarly, with a higher aggregate demand in which the rise in public spending is one of its
factors, the government expects to see a 7 to 8 percent GDP increase by 2022 (Mira, 2020) – increasing
the economy’s output.
In the short run, as the output increases, unemployment decreases – this is evident in the BBB as
well. From 2016 to 2018, around 4.199 million were employed under the projects of the BBB (De Vera &
Noriega, 2019). Hence there was a slight decline in the unemployment rate from 2017 to 2018 – 5.7 to 5.5
percent, respectively – and the employment growth in construction, brought about by the infrastructure
program, seems to be one of the contributing factors to this decline. This also resulted in the slight increase
of real daily wage in the first quarter of 2018 (Macroeconomics, Trade & Investment Global Practice, 2018).
Nevertheless, the BBB also has inflationary effect as it raises interest rate by increasing government
spending, necessitating more revenue through tax and/or borrowing – domestic and foreign.
Furthermore, it was already mentioned that unemployment will decrease, and this is because there
is a need for more human capital by creating more job opportunities to hire workers in order to implement
the projects under the BBB. In the long run, this will drive consumerism as it stimulates aggregate demand
due to the increase in employment and higher income – creating a multiplier effect. Through this, the
economy’s GDP will increase in the long run (Figure 2).

Figure 2. Aggregate Demand – Aggregate Supply

E2
E1
E4
E3

1Y0 2Y0 1Y1 2Y1

In Figure 2, if the real GDP is at the left of the long run aggregate supply (LRAS), the economy is
in recession, similar to our case during this pandemic. The increase of the aggregate demand (AD1 to AD2)
in a recession period (i.e. 1SRAS or short run aggregate supply in 1Y0 to 1Y1) will move the equilibrium
closer to the potential growth (LRAS) of the economy – from E1 to E2 – but not enough to reach its optimum.
So, to remedy the recession, the government can enact expansionary fiscal policy. And as seen in the
2SRAS, as the aggregate demand rises, the equilibrium moves to the optimal output (E3 to E4). Therefore,
the government holds on to the BBB and reprioritizes the infrastructure program in 2021 to bring the
economy to a boom.
The scale of the COVID-19 outbreak came as a surprise and our country was unprepared. Because
of this, the BBB had been greatly affected as it suffered from budget cuts that led to the decline in public
spending on infrastructure, prioritizing measures for COVID-19 response. The government also relies on
foreign loans to fund the projects and with the expanding debt of the country and the declining GDP, this
might result to adverse effects. And due to the community quarantine, the implementation of the projects
was momentarily stopped – all of which can be construed as limitations to ‘Build, Build, Build’ program.
III. DISCUSSION
Looking into the ‘Build, Build, Build’ program as an expansionary fiscal policy in relation to the
aggregate demand and aggregate supply, we can say that it can drive the economy to its potential growth
as it encourages consumerism. Nonetheless, theory and practice are two different domains and hence
disparities are inevitable.
There are unpredicted or unavoidable factors that hinder the ‘Build, Build, Build’ program from
achieving its goals, especially with the COVID-19 pandemic. For instance, economic activities were
temporarily halted in observance of the community quarantine, and this brought undesirable effect to the
economy. Contrary to the perceived growth or GDP expansion, the country is experiencing an all-time low
-16.5% GDP at constant 2018 prices in the second quarter of 2020 (Mapa, 2020). It might also take a toll
on the PPP since the private sector or companies lost a huge sum due to the closing of businesses during
the community quarantine period. Moreover, loans and grants from ODA were also utilized for COVID-19
response and not so much on infrastructure. The pandemic is also a major cause to the delays on the
implementation of the IFPs – the projects are far from completion. There is also a problem on absorptive
capacity and the concern that the main implementing agencies might not be able to maximize the use of its
budget due to inefficient delivery of the projects (Mira, 2020). These factors create discrepancies between
the ideals of the BBB and its execution.
With this said, the government must make adjustments to this expansionary fiscal policy to augment
its implementation. Among these adjustments, there is a need to enhance public procurement. The
implementing agencies must make use of their budget efficiently and that they must ensure transparency to
prevent corruption. Encouraging foreign investments is also necessary to finance the projects, and this can
be done through better investment incentives. Apart from that, excessive red tape must be reduced by
eliminating unnecessary processes. Through this, the implementation of the projects will be hastened and
will act as a counterweight to the delays. A sustainable means of revenue collection is also necessary for
the success of the BBB as it provides funds for the implementation of the IFPs (International Monetary
Fund, 2020). Thus, the two expansionary fiscal policies should undergo thorough scrutiny considering the
recession we are experiencing. Moreover, the government must assure that the infrastructure program
would promote general welfare and will not backfire on the economy.
The limitations of the ‘Build, Build, Build’ program might possibly impede economic growth, these
include delays in implementation, problems in public procurement and absorptive capacity of the
implementing agencies, excessive red tape, and other unforeseen setbacks like the COVID-19 pandemic.
However, it is an imperative for the government to execute corrective measures to address the limitations
of the expansionary fiscal policy or BBB.
IV. CONCLUSION
The ‘Build, Build, Build’ intends to increase government spending to further push the economy to
a “Golden Age of Infrastructure”. It opens the door to job opportunities, particularly in the industry sector,
to address unemployment in the country. This expansionary fiscal policy that acts as a stimulus for the
aggregate demand will encourage consumerism, driving the economy towards its potential growth.
The 100 Infrastructure Flagship Projects or IFPs focus on transport, water resources, energy, ICT
infrastructure, and social infrastructure to attain the current administration’s goal of enhancing the social
fabric, inequality-reducing transformation, and increasing growth potential. Aside from this, the BBB also
aspires to generate jobs, alleviate poverty, and increase economic activities.
There are also government agencies coordinating with one another to deliver the projects of the
BBB – the NEDA, DPWH, DOTr, BCDA, as well as DBM and DOF. The IFPs will be divided among the
main implementing agencies and they will oversee the execution of the program. It is then their
responsibility to deliver the projects efficiently and effectively.
Moreover, the GAA, ODA, and the PPP are the sources of finance for the infrastructure program.
The GAA finances the IFPs with the use of the national budget; the projects under ODA are funded through
foreign loans and grants; and the PPP encourages the private sector to participate in the program.
However, there are factors that adversely affects the implementation of the infrastructure program
– one of which is the COVID-19 pandemic. Because of the pandemic, the delivery of the projects were
interrupted as economic activities were temporarily ceased; there were also budget cuts on the
implementing agencies that lowers the government spending on infrastructure; and the gross domestic
product in 2020 contracted, contrary to the expected rise of GDP as the government invests on
infrastructure.
With this said, corrective measures to the BBB is crucial to resolve its limitations. A smoother and
efficient process for the projects will accelerate its implementation. And a careful examination on the
provisions of the program will safeguard it from corruption and other undesirable outcomes.
As the country undergoes a recession due to the pandemic, the government eyes the ‘Build, Build,
Build’ program as a major means for the economy to accelerate towards recovery in the long run. The
government has allotted around P1 trillion for infrastructure, and the BBB is projected to yield more job
opportunities, around 140,000 to 220,000 jobs, that can help those who have lost their jobs during the
pandemic. The BBB, along with the CTRP, must be effectively utilized in order to respond to the economy’s
need for resurgence.
Therefore, there is a great possibility that the ‘Build, Build, Build’ program will build a road
towards economic growth if the constraints of the expansionary fiscal policy are addressed. It will lead the
economy to its recovery from the recessionary gap under the COVID-19 pandemic.
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