Chapter I

INTRODUCTION

A. Background of the Study

Globalization from the word global means spreading throughout the world, in other words

spreading world-wide. Globalization may be defined in several ways, and from different

perspectives. One can talk about globalization as the widening and deepening of international

flows of trade, finance and information in a single, integrated global market. Or, one can refer to

it as the transformation shrinking of the world into a global village, as borders disappear, distances

shrink, and time shortens. The aim of having a globalized community is to have interdependence

of the entire world and its people from each other with concern for the rest of the world at the

expense of national self-development and self-interests. Specialists say that globalization refers to

the increasing integration of economics around the world, particularly through trade and financial

flows. This integration of economics is concerned more on the inclusion of people of all races on

an equal basis in a world-wide view of living in a shared global community. But we should also

put into consideration that it could also refer to the movement of people from which we could

extract labor, knowledge from the ever increasing advancements in science and technology,

cultural, political and environmental dimensions of globalization. With globalization in hand, there

would be an extension beyond national borders of the same market forces that have operated for

centuries at all levels of human economic activity.

Build, Build, Build Program also known as ‘Dutertenomics’ is an infrastructure

development program expected to increase infrastructure spending to P8.6 trillion over the next

six years. Build, Build, Build Program means;

 1) More bridges and roads;

2) More railways, urban mass transport, airports and seaports; and

3) New and better cities

According to National Economic and Development Authority NEDA, foreign borrowing

will account for only 15% of the funds, but upon closer review of the 75 flagships they approved,

it shows the government is going to borrow almost half (48%) of its funds from foreign lenders.

As of June this year, Duterte’s administration is borrowing money from the following countries /

foreign lenders;

1. Japan (3 projects) – P226.89 billion

2. China (3 projects) – P164.55 billion

3. South Korea (2 projects) – P14.06 billion

4. World Bank (1 project) – P4.79 billion

B. Statement of the Problem

This study aims to investigate and understand the impact of the program using the set

objectives as a basis and evaluate the changes in the economic condition through survey. The

general objective of this study is to investigate the positive and negative feedback of the BUILD,

BUILD, BUILD Program in our community.

1. What is BUILD, BUILD, BUILD Program?

 2. How communities and the people of the Philippines can make most out of BBB

Program?

3. Learning the positive and negative feedback on the current’s administration BBB

program.

C. Significance of the Study

The study considers the following beneficiaries:

1. To the students. This research will help the students understand the purpose of BBB

Program

2. To the Teachers. This research will provide the teachers knowledge about BBB Program

with the hopes that the teachers may find it interesting and relevant to future classroom

teachings.

3. To the community. This research will help the community understand the BBB Program

and how to take full advantage of its prospected opportunities.

D. Scope and Limitation

This study focuses on determining the various understanding of Build, Build, Build

program on common individuals and its significant effects on their economic status. This is an area

the researchers want to explore, for there is a need to understand identified economic concerns in

order to further public participation and engagement with the government system flow. With

regards to the respondents, the researchers selected 50 college students (at least 18 years old) of
St. Rita’s College of Balingasag. Approximately,10 respondents per program namely Education,

Business Administration, Hotel and Restaurant Management, Information Technology and

Criminology will undergo the survey procedures.

E. Conceptual Framework

Independent Variable Dependent Variable

BUILD, BUILD, BUILD Economic Effects

Program

FEEDBACKS

Both of the above factors are axacerbated by the Build, Build, Build Program of the Duterte

administration, which shows its economic effects, the risk and the benefits towards the selected

individuals. Aid us to systematically identify, precise negative or positive feedback realating the

variables.
F. Theoretical Framework

The study is anchored on Appadurai’s theoretical perspective. The conception of global

flows, defining the relationships between individuals, groups of people, and ideas in contemporary

society. According to this theory, there has been a dramatic shift in modernity and the movements

of people, media, technology, capital, and ideologies that have always been present in the world

have suddenly increased to a rapid pace with the advent of the Industrial Revolution and

Enlightenment thought. The disjuncture between the five “-scapes” is the key to understanding the

complexities of globalization. Each of the -scapes informs the others and all are present to varying

degrees in almost any instance of interaction between parties, regardless of how global or

widespread the phenomenon.

Arjun Appadurai (1990) has argued that it is useful to think of the global in terms of Scapes

and flows, rather than a specific place as such. This is a helpful insights when applied to the

problem of locality in that it collapses the separation between the global and the local, and takes

us beyond the unidimensionality of causality on these particular issues, If place can be understood

in terms of mediational and relational flows, we can ask if globalization has impacted on the urban

arena of identify formation trashing taken-for-granted place-oriented associations. Appadurai

contrasts his idea of flows and scapes with the notion of relatively stable communities from which

people act. But have these communities already been transfigured?

As Martin Albrow (1997) has forcedly argued in reply to Appadurai, the assumption of

relatively stable communities in a context of disconnected flows is highly problematic given the

perspectives from which people view their actions, rendering community an open question in the

age of global restructuring.

 George Ritzer globalization theory involving the integration of the global and the local,

producing a unique outcome wherever in the world it occurs. The imperialistic ambitions of

corporations, states, and others and their imposition of their way of doing things, products, and so

forth on the local.

G. Definition of Terms

 Globalization – through globalization, Philippines is influenced by other country to have

the build, build, build program

 Build, build, build Program – also known as ‘Dutertenomics’ is a program for people

and the nation’s

 Foreign borrowing – lending money from other countries

 Global Community – organization committed to working partnership with communities

worldwide to bring about sustainable, impactful changes that improves the lives and

livelihoods.
 Chapter II

REVIEW OF RELATED LITERATURE

The following section contains literature related to the area of study. It contains literature

relating infrastructure or road development to economic growth, trade openness, and poverty

alleviation.

(Mendoza, 2017) Many have already started to weigh the pros and cons of such an

ambitious outline of projects as well as the staggering amount of investment required, much of

which will be borrowed. The Department of Budget and Management has already stated that the

‘Build, Build, Build’ program would not result to a debt crisis similar to the “plagued” economy

in the early 80s. “Concerns over a looming debt crisis, as a result of the Duterte Administration’s

‘Build, Build, Build’ program are unwarranted,” said the Department in the statement adding that

the country’s debt position would remain stable despite the planned increase in borrowings.

According to the Department, this is largely due to the administration’s focus on infrastructure

rather than other capital outlays such as corporate equity and capital transfers to LGUs. Foreign

Technical Undersecretary for International Economic Relations, Manuel Teehankee, also shares

that the ‘Build, Build, Build’ program “complements the President’s 10-point socioeconomic

agenda, as well as the federal regionalist and sub-economic regions program, which will also

improve connectivity through logistics improvement and infrastructure development.

Despite those praises and assurances, many remain doubtful. According to international

political risk analyst Anders Corr, “Dutertenomics, fuelled by expensive loans from China, will

put the Philippines into virtual debt bondage if allowed to proceed.” Corr goes on to explain that

the increase in infrastructure spending could increase the current Philippine national debt from
$123 billion, to $290 billion and that doesn’t even include interest. Assuming an interest rate of

10%, that debt would balloon even further to $452 billion, bringing the Philippine debt to GDP

ratio to 197%, the second-worst in the world. According to Corr, China is likely to lend at an

interest rate between 10% -15%.

Under the hybrid-PPP scheme, the Philippine government also intends to secure ODA from

countries that give the government extending the ODA the ability to select the contractor to be

used for the project (likely a contractor from their own country) as well as to hire laborers from

them as well. For example, China has financed projects from other countries for which they have

required that the country obtaining the ODA hire a Chinese construction firm and hire Chinese

laborers. This is directly in conflict with one of the main goals of the Philippine government with

the Build, Build, Build program in that they expect this program to create millions of jobs for

Filipinos.

There are also concerns that that the increased borrowings would weaken the economy.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla has raised concern on the “seemingly

imminent wind-down of ultra-easy monetary policies in advanced economies” and how these

events may have far-reaching consequences that could undermine the Philippines’ economic

performance. This in addition to the fact that the Philippine peso exchange rate continues to show

weakness against the dollar, reaching levels last seen about 11 years ago. The current account has

also slipped into negative balance during Q1 this year, reflecting a deficit of $318 million as of

March versus a surplus of $730 during the same period last year. Increased outflows from the

BSP’s foreign exchange operations have also diminished the country’s international reserves to

$81.4 billion as of June. Veteran journalist Jose M. Galang states that while “the Philippine

economy in general remains fundamentally strong, weaknesses persist. Any surge in external
borrowings to levels beyond the absorptive capacity could choke growth sectors and lead to serious

issues similar to what the country experienced under Marcos.”

All of these projects if implemented well will surely benefit our children. There will be

sacrifices while the construction is going on. Meanwhile, you and I can be vigilant citizens by

watching out that the money is well spent. Citizen Jane adds “the amounts involved for the planned

infrastructure are going to be mind boggling. And where there is a lot of money, and if the system

is not airtight, there will be a lot of money to be made on the side. Not to mention substandard

construction. It happens in the private sector. It happens in government.”

(NMRIA, 2016; PSA, 2013) The Philippines is a country of 7,641 islands, with an average

GDP growth of 6% for the past five years. It is currently classified as a middle income country by

the World Bank however its potential for further development has been acknowledged worldwide.

In order for such development to be realized and in order to maximize the opportunities that spring

from various free trade agreements and from the growth of industries, there is a need for the

Philippines to improve the interconnection among its thousands of islands and likewise also

improve its performance where logistics, infrastructure, and supply chain are concerned.

(WEF, 2015) According to the Global Competiveness Index, the country has a value of

3.43 for Infrastructure and a global rank of 90. At the same time, when the quality of overall

infrastructure and the quality of roads were ranked, out of seven, the country only scored 3.31 and

3.30 respectively

(JICA, 2014) Among the most pressing issues the country faces today is that of traffic,

which JICA has estimated to cost the country 2.6 billion pesos daily6. This amount has been

forecasted to increase to almost six billion per day by 2030.

 (Pineda, 2016) In order to decrease costs and improve overall logistical performance, one

central area that may be focused on would be infrastructure, more specifically, transportation

infrastructure. According to Pineda (2016), the Philippines, with its current infrastructure spending

averaging 2.3% of GDP, would need to spend at least 2% more in order to be at par with Thailand

and Vietnam, and around 4-5% more in order to be at par with Malaysia and Indonesia

respectively.

(So, 2016) The current administration seems to be prepared for such, especially given how

the Secretary for Budget and Management has announced plans to spend up to seven trillion pesos

on infrastructure from 2017 to 2022, or to go as far as to allocate 7% of GDP to infrastructure

development.

With this, and with the commitment of President Rodrigo Duterte to focus on inclusive and

geographically-balanced economic growth, the current administration is expected to usher in the

Golden Age of Infrastructure in the Philippines.

(Komatsuzaki, 2016) The International Monetary Fund also engaged in studies13 on public

infrastructure investments in the Philippines. According to one study conducted by Komatsuzaki

(2016), the Philippines’ investment rate of 21.8 % was low in comparison to other nations around

the world. The country’s low levels of public investment have brought about low levels of public

capital, which in 2013, amounted to 35% of GDP in comparison to the average of 75% among

other ASEAN neighbors. Among the causes identified for such a predicament include “inadequate

infrastructure, weak investment climate, and, restrictions on foreign direct investment”. It was

suggested that investments, specifically in infrastructure, would adequately complement the

country’s growing population and at the same time, grow the economy by improving productivity.
The primary procedures employed in the study include simulations and sensitivity analyses. A

more specific way by which infrastructure can be said to contribute to economic growth would be

through its role in raising productivity. Komtsuzaki (2016) mentions: Public investment increases

have sustained output effects beyond the direct demand effect of the spending increase because of

the productivity-enhancing impact of public infrastructure… The resulting increase in marginal

productivity of capital and labor crowd in the private investment and increase demand for labor,

which induce a higher consumption due to higher household income.

(NEDA-PDP) Anchoring itself on President Rodrigo Duterte’s ten point agenda, the 2017-

2022 Philippine Development Plan (PDP) is considered to be “the first medium-term plan to be

anchored on a national long-term vision, or AmBisyon Natin 2040, which represents the collective

vision and aspirations of Filipinos for themselves and for the country”.
 Chapter III

METHODOLOGY

This chapter presents the methods of research and the procedures that will be used by the

researchers to gather data. This will include research design, research setting, respondents,

instruments and statistical data used to treat the data that will be collected.

Research Design

The researchers utilize qualitative analytical descriptive method of research, use to observe,

describe and document aspects of situation as it naturally occurs.

Research Setting

This study will be conducted at St. Rita’s College of Balingasag located at Barangay 3,

Balingasag, Misamis Oriental.

Respondents

The respondents of the study are 50 randomly chosen first year college students currently

enrolled at St. Rita’s College of Balingasag.

Instrument

A short BBB Program reading material and a researcher-made survey questionnaire will

be used for the survey procedure.

Data Gathering Procedure

In doing the survey, the researchers will provide a short BBB Program reading material to

the respondents before answering the survey questions. The reading material contains important

details about BBB Program. After the respondents have read the reading material, they will answer

the researcher-made survey questionnaires.

The Reading Material

Instructions: Please read the article before answering the survey questions.

The ‘Build, Build, Build’ program, also known as ‘Dutertenomics’, is an infrastructure development
program expected to increase infrastructure spending to P8.6 trillion over the next six years. BBB means:

1) More bridges and roads;

2) More railways, urban mass transport, airports and seaports; and
3) New and better cities

Foreign Lenders: who will gain the most from this venture
1) Japan (3 projects) – P226.89 billion
2) China (3 projects) – P164.55 billion
3) South Korea (2 projects) – P14.06 billion
4) World Bank (1 project) – P4.79 billion

How Will It Affect Filipinos?

Reforming the taxes can lead to three changes:
1) Higher value-added tax (VAT)
2) Higher and expanded excise tax on all petroleum products
3) Sugar excise tax

Economic Risks:
1. Inflation- rise of prices.
2. Peso exchange rate depreciation.
3. Interest rate changes- especially from borrowed funds.
4. The contactor choice- failure of delivery of the original objectives because of the wrong choice of contracting
parties.
the article before answering the survey questions.

5. Absorptive capacity-poor contactor choice may result to poor performance in the implementation of big
projects as competent skilled workers are not acquired in a more open framework of economic liberalization.

Economic Benefits:

1. Transportation- mainly focused in infrastructure, BBB program will make the movement of goods and people
more efficient, bring down the costs of production, encourage investments and improve rural incomes.

2. Climate change resilience- the rise of flood control facilities will help protect vulnerable communities.

3. Tourism- travelling within and to the Philippines is expected to be more accessible fast and cheap.

4. Construction and real estate- urban growth and regional development are key to nationwide economic
activities vision to build new and better cities.

5. Local investments- boost local investment and create local investment opportunities.

6. Agricultural Business- aspires to build bridges and farm-to-market roads, railways and seaports, BBB
program will boost the agribusiness industry’s productivity.
The Survey Questionnaire:

Dear Respondent,

Greetings! Praised be Jesus and Mary!

We the first year students from the Teacher Education Program in St. Rita’s College of
Balingasag are conducting a research about the “Build, build, build Program and Its Economic
Concerns”. In line of foregoing, we prepared this survey questioner to collect the necessary data
which needed for our study.

Please answer the following question honestly. Your answers will be held confidential.
Thank you and God bless!

-The Researchers

______________________________________________________________________________

Name (Optional) : ________________________________ Age: ____________

Program:________________________________________ Gender: __________

Instructions: Please read the questions carefully and put a check mark on the space
provided of your choice.

I. Yes No
1. Before reading the article, are you aware about the government’s BUILD,
BUILD, BUILD Program?
2. After reading the article, will you support the BBB Program?
3. Do you believe in the capacity of Pres. Rodrigo R. Duterte in the
implementation of BBB Program?
4. Do you think, 6 years is enough to achieve the goals of BBB Program?
5. Do you think BBB Program will be a success?
6. Do you think, BBB Program will provide positive effects to the country?
7. Do you think BBB Program is beneficial to all?
8. Do you think BBB Program will help you land job opportunities in the future?
9. Do you think BBB Program will uplift the economic status of Filipinos?
10. Do you think BBB Program is the answer to the unresolved economic crisis
of the Philippines?
II. Provide your insights short and concise. You can use any language of your choice with
your answers.

1. Do you think, it will be worthy or risky to fund the BUILD, BUILD, BUILD Program through
foreign country lenders? Why?

2. What do you think might be the greatest challenge in the implementation of goals of the BUILD,
BUILD, BUILD Program? Provide your insight/s.
 St. Rita’s College of Balingasag
Balingasag, Misamis Oriental
Higher Education Department
S.Y. 2018-2019

A Research Study On

BUILD, BUILD, BUILD Program and Its Economic Concerns

Submitted to:

Ms. Aira Riza S. Cablinda. LPT

Submitted by:

Rey C. Carreon

Franz Alex M. de la Cruz

Katherine R. Dahang

Shaina Jhane B. Donoso

October 25, 2018