What the Sangley Airport Means for Our Economy

Filipinos love investment and the Sangley Point International Airport in Cavite along Manila Bay, being bought out by the SPIA Development Consortium next month is one of the biggest construction contracts that we’ll likely ever see. The Inquirer reported on this incident and highlighted that a representative of the SPIA Development Consortium was invited by the Cavite government to attend the awarding and signing ceremony of the airport project.

There were so many failed biddings that took place last year, as no offers were placed prior to the deadline. This airport is extremely important given its primary aim is to reduce congestion from the Ninoy Aquino International Airport, the country’s largest gateway.

The SPIA consortium will be joined by the Samsung C&T Corp, Munich Airport International GmbH, and the Arup Group. Samsung C&T Corp built the iconic Petronas Twin Towers and Burj Khalifa. Munich Airport International GmbH, on the other hand, is the management services arm of Europe’s only five-star rated airport, Munich Airport. Last but not the least, the Arup Group is known for many high-profile development projects in the world. They got the contract after completing a competitive challenge, the swiss challenge. The awarding and signing ceremony of the new airport is tentatively scheduled for September 14.

The airport in Bulacan, spearheaded by San Miguel Corporation, had the exact same goal. Basically, they wanted to create a fully modernized, world-class, green airport in light of the supposed increase in demand for air transport services and air travel over the next 30 to 40 years. As operations in NAIA became phased out and too old, where do we expect the influx of foreign nationals, tourists, and Filipino domestic travelers to go?

The answer is the Sangley airport. Here’s what the implementation of a new airport means for our economy.

The Good Things About The Sangley Point International Airport

Proposed Sangley Point International Airport

Photo from discoverthephilippines.com

One of the good things about the Duterte regime is that they implemented the Build Build Build program in an effort to improve poverty rates, encourage economic growth, and reduce the overall congestion in Metro Manila by addressing the country’s infrastructure gap.

There were so many infrastructure projects implemented during this time and it seems as though the Sangley airport is in line with many of its goals.

While this means that infrastructure spending will only continue to increase, it’s an investment project that the government seems to be more than willing to take. Infrastructure spending in the Philippine government increased two-fold compared to the past six government administrations. On that same note, you should know that infrastructure spending from 2016 to 2019 was at an alarmingly high 4.9% of the country’s gross domestic product, which, according to the Inquirer, is more than double the 2.4 percent average spending that the Filipino government has grown accustomed to over the last 50 years.

What may be interesting to note is that according to the World Economic Forum, improving infrastructure and growth often come hand in hand, a good sign for the country. In a published paper by Arrow and Kurz, the two authors incorporated infrastructure into the theory of growth literature infrastructure, and empirical literature more than supports the role of infrastructure in promoting growth, citing that productivity increases when the people, government, and manufacturers have the capacity to create. The World Bank reviewed the importance of infrastructure and astutely pointed out that the development of a government’s internal infrastructure leads to economic growth, poverty alleviation, and improved decision-making when it comes to the environment.

Anecdotally, these claims make total sense. Say, for example, you’re a farmer whose farm and land are located deep into the mountains. What would normally take hours of trekking to reach the market is made quicker and halved by the infrastructure of building roads, railways, and pathways to the city.

Telephone lines and communication lines make the entire process easier. In India, for example, the information era reigns supreme. One could argue that India has become one of the most connected countries in the world. They sell 15 million cellphones a month and there are currently over 509 million cellphones in Indian hands. Just imagine the sheer amount of telephone poles needed to connect all of this. The 15 million cellphones that they sell every month? Yeah, that’s the most number of connections that any country makes, including global superpowers like the US and China. This has also paved the way for an increase in India's digital numbers. It tapped the potential of India due to the number of people who'll get phones for the first time. This can be seen with the sudden rise of two Indian channels being the most subscribed and third most subscribed YouTube channels in the world. Indian cricketer, Virat Kohli is also the 17th most followed person on Instagram with 212 million followers. He is ahead of Nicki Minaj, Neymar, Lebron James, Drake, and even Blackpink's Lisa.

Why are we telling you this? Well, that’s because India has shown that all this investment into infrastructure works. They have the fifth-largest economy in the world in terms of purchasing power.

This, we believe begs the question: is the Philippine Economy growing?

Is The Philippine Economy Growing?

Honestly speaking, there’s so much more nuance that goes into this question. The Gross Domestic Product in the Philippines was worth 394.09 billion USD in 2021, up from the 2020s 361.75 billion USD.

That’s great right? But don’t forget that this was all expected. 2020 was a horrible year for the world economy. The pandemic shut down so many things that we’re lucky to not have experienced something similar to the Asian Financial Crisis.

Here’s the thing: we’re experiencing the reeling effects of the immense growth of 2021. The Philippines' economy is not growing at the moment, but so is the rest of the world’s. The US government, for example, updated the estimate of the US economy’s performance in the April-June quarter and confirmed that the economy shrank for two straight quarters. This means that the United States of America, by definition, is in a recession.

So far, the signs don’t point to anywhere else except the Philippines as well.

https://www.crownasia.com.ph/news-and-blogs/lifestyle-blogs/selected/what-the-sangley-airport-means-for-our-economy