With lower than expected public spending in the first half of the year that was seen as a cause for slowed growth especicially in the second quarter, bigger spending on infrastructure in the next six months are expected to generate domestic economic activity that will help generate more jobs. Already a number of infrastructure projects are lined up to be implemented in the region.
Three major road projects worth Php887 million from the Php1 billion appropriated for the district of Kalinga are reportedly set to be concreted by the Department of Public Works and Highways (DPWH) this year to improve inter-municipality and inter-provincial accessibility. The amount is alloted for the concreting of the Kalinga-Abra Road, Balbalan-Pinukpuk Road, and Calanan-Pinukpuk Road. The said road projects are funded through DPWH’s 2011 regular fund.
Some Php32 million has also been alloted to concrete more portions of the Dantay-Sagada-Besao national road to improve accessibility to Sagada, another world famous tourist destination. Once program of works of the projects funded by the Php32 million are approved by DPWH-CAR, these will be scheduled for bidding. DPWH-CO has also approved additional funding for the upgrading of the Dantay-Sagada Road which will be taken from the 2011 regular budget of the province’s District Engineering Office (MPDEO). Upgrading of the Dantay-Sagada Road is one among major tourist-related infrastructure projects in the region. Currently, about 1.3 kilometers of the Dantay-Sagada Road stretch is being concreted with a Php50 million funding from the MPDEO’s regular budget of last year and is expected to be finished by December this year.
The House committee on public works chaired by Benguet Representative Ronald M. Cosalan has reportedly favorably endorsed the conversion of four provincial roads into national roads. The roads approved for conversion include the Mountain Province-Benguet Road via Guinsadan-Mankayan section, Abatan-Maba-ay Road, Mountain Province-Isabela Road and the Mountain Province-Ifugao Road otherwise known as Tuboy Road. Cosalan cited the conversion of local roads into national roads will help ensure funding support to improve the roads and eventually cut travel time that hopes to spur economic activities with enhanced accessibility and mobility of goods and people.
To further harness the hydro power potentials of the region, Ifugao has endorsed in June five minihydro projects in the province to the Department of Energy (DOE). The projects include the Ibulao 1 River minihydro project located in Barangay Bokiawan; Ibulao 2 River in Barangay Hucab; Hungduan River in Barangay Bokiawan; Asin River, all in Kiangan town; and the Lamut River in Barangay Jolowon in Lamut. The endorsement of these projects is in line with the vision of the provincial government to promote Ifugao as a center for minihydro development in the Cordillera. The said projects are also expected to lower the cost of electricity in the province as the Ifugao Electric Cooperative can already buy the power at a lower cost and provide direct benefits to the communities in generating employment and providing revenues to the LGUs.
The important role of the region as a source of renewable energy specifically hydroelectric power generation has been further highlighted. Through the rehabilitation efforts of SN Power Aboitiz (SNAP)-Benguet), the Ambuklao Hydroeletric Power Plant went on-line in June with the commercial operation of its Unit 3 turbine that began supplying an additional 35 MW of power to the Luzon grid. The rehabilitation of the power plant with an original installed capacity of 75 MW to be upgraded to 105 MW is expected to be completed in the third quarter and its full operation will begin at end of the year. Also on-going is the renovation of SNAP-Benguet’s other facility, the Binga power plant, that will upgrade the plant from 100 MW to 120 MW within three to four years.
Both Ambuklao and Binga, the country’s two oldest hydroeletric facilities, are the first renewable energy plants to be registered as clean development mechanism (CDM) projects as precribed by the United Nations Framework Convention on Climate Change. The CDM is a system resulting from the Kyoto Protocol, the climate change treaty ending in 2012, which requires all countries to reduce carbon emissions. The CDM was designed to encourage countries to rely on projects that reduce greenhouse gas emissions by using efficient and renewable energy. Firms that undertake these projects are entitled to carbon credits equivalent to the carbon emissions they displace, but only after a strict auditing process. Carbon emission reduction credits can be converted into money when traded in carbon credit markets in Europe at prevailing market prices. The Ambuklao and Binga facilities are expected to generate 180,000 carbon credits yearly, equivalent to the carbon dioxide produced by emissions from about 80,000 cars.
Even as economists have raised concerns that revenues could slow down this semester since the peak collection months have passed, the Department of Finance (DoF) is confident it can sustain the momentum of improving revenue collections in the second half of the year in the wake of a robust first half. Already, the government has almost hit its revenue effort target for the year in the first semester with the revenue-to-GDP ratio registered at 14.1%, slightly below the DOF’s full-year target of 15.1 percent. The BIR-CAR is set to continue implementing its major revenue-raising activities in the region related to enhanced taxpayer voluntary compliance, improved legal tax policy advice services and efficient collection and assessment.
To improve the employment situation, the Enhanced Phil-Jobnet of the Department of Labor and Employment (DOLE) is expected to be launched in the coming months. All PESO (Provincial Employment Services Office) Managers will be mobilized to actively solicit job vacancies in establishments that require semi-skilled and low-skills qualification in anticipation of the possible displacement of overseas workers especially under the “Saudization” policy of Saudi Arabia. This is to effectively provide job referral assistance and to ensure easy access to job postings of available vacancies in the Phil-Jobnet. Likewise, DOLE-CAR is set to provide continuous livelihood assistance in the different provinces that include livelihood enhancement to income augmentation for the formal sector in the form of training, common service facility and raw materials, tools and jigs.
We would like to acknowledge the contribution of the following RES Task Force members:
The Quarterly CAR RES looks at the performance of the regional economy based on leading economic indicators. Preliminary data is used and is subject to change/revision in subsequent quarters. The Report also includes references from leading national, regional and local newspaper dailies and weeklies.
Prepared by the:
National Economic and Development Authority CAR Regional Office
Botanical Garden, Leonard Wood Road 2600 Baguio City
Tel. No. 442-3232; 442-9573