Category:

DPWH SENIOR EXECUTIVE EMPHASIZES URGENCY AND ACCOUNTABILITY IN MINDANAO ROAD PROJECTS
A top official of the Department of Public Works and Highways (DPWH) has issued a stern reminder to all government engineers, consultants and contractors involved in the on-going projects under the Improving Growth Corridors in Mindanao Road Sector Project (IGCMRSP).
In a recent coordination meeting at Ipil, Zamboanga Sibugay, Senior Undersecretary Emil K. Sadain stressed the importance of executing projects efficiently and effectively, adhering to the highest standards of quality and safety.
“It is imperative that we approach our work with a strong sense of responsibility and dedication. Delays and substandard work are unacceptable and will not be tolerated,” Senior Undersecretary Sadain said.
He emphasized Secretary Manuel M. Bonoan’s marching order for a heightened sense of urgency, unwavering commitment, and full accountability in the execution of projects. These efforts will play a significant role in the economic development and connectivity of Mindanao under Bagong Pilipinas.
The ₱14.5 Billion IGCMRSP is funded through an Official Development Assistance (ODA) loan from the Asian Development Bank (ADB) and is being implemented by the DPWH Unified Project Management Office - Roads Management Cluster II-Multilateral (UPMO - RMC II).
IGCMRSP supports the goal of improved physical connectivity, which is vital to the country’s development efforts as outlined in the President Ferdinand R. Marcos, Jr. administration’s Philippine Development Plan 2023-2028 and the 8-Point Socioeconomic Agenda.
The project encompasses the construction or improvement of seven (7) road subprojects with a total length of 151.97 kilometers, including 28 bridges and one (1) sea-crossing bridge sub-project, the Guicam Bridge, which spans 1.21 kilometers, all located in the Zamboanga Peninsula. Additionally, the project includes the construction of three (3) bridges with a total length of 1,790.66 lineal meters, including approaches, located in the Province of Tawi-Tawi.
To date, DPWH UPMO - RMC II has achieved an overall accomplishment of more than 71 percent for IGCMRSP. This includes 140 kilometers of concrete cement paved road and the completion of 14 bridges.
During the meeting, Senior Undersecretary Sadain conducted an in-depth review of the accomplishments against the timeline of each sub-projects and directed field engineers, contractors, and consultants to adopt adaptive planning to mitigate further delays.
Efforts to expedite work include deploying additional machinery and manpower and implementing round-the-clock work shifts to compensate for lost time on delayed sub-projects. The delays have been attributed to logistical challenges, weather conditions, and unforeseen technical issues.
A site inspection was conducted by Senior Undersecretary Sadain at the Guicam Bridge sub-project in Zamboanga Sibugay. He was accompanied by UPMO Project Directors Teresita V. Bauzon, Soledad R. Florencio, Benjamin A. Bautista, and Rodrigo I. Delos Reyes; Project Managers Emmanuel M. Supe and Evangeline L. Carabal; and Engrs. Barley H. Sali and Nancy C. Mari.
Senior Undersecretary reminded the contractor, Grace Construction Corporation of the strict timelines and performance benchmarks set for the project. To date, the Guicam Bridge has completed abutments A and B, and piers 1, 2, 3, 9, 10 and 11 and is targeted for full completion by mid-2025.
The realization of this inter-island bridge project complementing the 29.70-kilometer Lutiman-Guicam-Olutanga Road, a completed sub-project of IGCMRSP, is poised to enhance the economic activities and logistics in the municipalities of Alicia and Olutanga Island towards other towns of Zamboanga Sibugay.
Meanwhile, the construction of the 541-meter Nalil-Sikkiat Bridge in Tawi-Tawi Province by China Wuyi Co., Ltd. and under the supervision of UPMO Project Manager Ernante S. Antonio is progressing rapidly.
At more than 60% completed, the fast-paced construction reflects the commitment to delivering crucial infrastructure that benefits local communities and stimulates growth in the area.
This project is part of the national government’s efforts to enhance infrastructure in the Bangsamoro Autonomous Region for Muslim Mindanao, improving connectivity and supporting economic development.
Other on-going sub-projects are the 33.05-kilometer Curuan-Sibuco Road connecting Zamboanga City to Zamboanga Del Norte with accomplishment of 87% by the joint venture contract of M. Abubakar Construction and Engineering Inc. and Sino Road and Bridge Group; 24.52-kilometer R.T. Lim - Siocon Road connecting Zamboanga Sibugay and Zamboanga Del Norte at 88% and 7.38-kilometer Gutalac-Baliguian Alternative Road in Zamboanga Del Norte at 52% under China Wuyi Co. Ltd.; 17.93-kilometer Siay-Gapol Road in Zamboanga Sibugay under ESR Construction & Development Corporation in venture with Qingdao Municipal Construction Group Co. Ltd at 71%; and Malassa-Lupa Pula Bridge in Tawi-Tawi at 31% under Vicente T. Lao Construction and China Wuyi Co. Ltd.

Trenchless Asia 2024 - the Philippines gears up for groundbreaking infrastructure event focusing on Trenchless Technology
In 2016, the Philippines Government Department of Environment and Natural Resources passed the Clean Water Act Legislation (DAO 2016-08), Republic Act No 9275. The approval of this legislation propelled the demand for wastewater treatment in the Philippines, resulting in sky rocketing demands for sewerage treatment plants and sewerage networks. The rapid development and unplanned urbanisation of Metro Manila and its surrounding cities however makes conventional open excavation method of laying sewer pipelines extremely unfavourable, hence, giving to the rise in demand for trenchless technology pipelaying works, both for sewers and water.
In the Philippines, one of the most significant trenchless projects was the first water system tunnel, better known in the Philippines as the Umiray-Angat Tunnel. The project was launched by Metropolitan Waterworks and Sewerage System (MWSS) in the mid-90’s, and in 1996, the Robbins 4.88m shielded tunnel boring machine started its long journey. The result was a 13km tunnel with a 4.30m diameter.
As demand for new pipelines increases, Metro Manila only has 20 to 25% sewerage coverage and about 75% freshwater coverage. There is still a huge gap between what is needed, and what is currently in place, and with the growing population and increase in population in density, the urgency for new pipelines is now greater than ever before. Over 600km of sewer pipeline needs to be laid to meet the current and short-term demand across the Metro Manila and its surrounding cities, the aging and small existing water pipelines also require upsizing, upgrading or additional pipeline.
This makes Manila the ideal city to host Trenchless Asia, which heads to the World Trade Center Metro in Manila on 16th & 17th July 2024.
Now in its 13th year Trenchless Asia attracted over 2500 visitors in Kuala Lumpur, Malaysia in 2023, this event will bring together industry leaders, professionals, experts, and students to explore the latest advancements and innovations in trenchless technology. Featuring the Philippines most prominent water and sewerage providers, including Manila Water, Maynilad Water and Metropolitan Waterworks and Sewerage System. Dr. Sam Ariaratnam, Professor and Sunstate Chair of Construction Management & Engineering at Arizona State University, a world-renowned HDD expert with over 25 years of experience in trenchless pipeline engineering research and education, will also be in attendance.
Highly regarded international organisations are also taking part in the conference, including the Philippine Tunnelling Society, the Hong Kong Tunnelling Society, Arup and the PE100+ Association and JBP Trenchless Training. Trenchless Asia has also formed a partnership with Batangas University, the student’s participation will support their technical learning and increase their understanding of the opportunities available to them in this high growth and innovative sector.
As the leading trenchless technology event for the Asia-Pacific region, an impressive line-up of exhibitors will fill a packed exhibition hall, providing a unique opportunity for visitors to access over eighty of the sector’s leading product and service providers, including Vermeer, Herrenknecht, Pipesolution Inc, XCMG, USAE, Drillto and DCI. The amount of new pipeline that needs to be installed or upgraded, coupled with the limited number of service providers, means the Philippines is one of the world’s highest growth potential markets, and makes Trenchless Asia the not to be missed event.
To book your free ticket to attend Trenchless Asia head to the website www.trenchlessasia.com or click here

Challenges and Outlook for the Construction Industry
The construction industry, a key contributor to the Philippine economy, generated about seven percent (7%) of the country’s gross domestic product in 2022. The recent COVID-19 pandemic affected the real estate and construction industry and caused financial burden due to additional health and safety requirements, project suspension and delays, and reduced productivity resulting from massive supply chain disruption, and material and equipment procurement difficulties. The construction sector is expected to see growth in the following years as the country’s economy recovers. However, raging inflation, high-interest rates, and global geopolitical instabilities are seen to challenge growth forecasts.
The industry has been characterized by declining efficiency and performance over the years. As the industry continues to evolve, it is likely that additional steps will be taken to address new and emerging issues. With economic activity in the country picking up, the Philippine construction sector is bound to face more challenges. This article discusses some of the major challenges faced by the industry and how they can be overcome.
Labor Shortage
The lack of skilled workers and professionals, ranging from architects and engineers to construction workers and equipment operators, create difficulties for contractors in hiring and retaining talent. The growing skills gap contributes to this labor shortage as the construction sector urgently needs skilled labor with the need to recruit over two million workers by 2025 to meet demand. This gap is attributed to limited training and educational opportunities, coupled with an aging workforce and Filipinos looking for better opportunities abroad. Incorporating construction technology may help in fixing the issue of labor shortage in the construction firms but the industry is also slow when it comes to adapting to new technology. By investing in training and modern recruitment strategies, construction firms can bridge the labor gap, bringing in fresh talent and new perspectives.
Cost Overruns and Construction Delays
Cost overrun occurs when a project exceeds its original budget due to unexpected expenses, delays, and other unforeseen factors impacting project management, construction firms, and the industry at large. The fluctuating cost of construction materials, including raw materials, challenges firms to forecast future expenses affecting project profitability. Poor productivity and lagging technological advancements lead to delays and increased costs.

Delays also pose a major challenge in the industry, significantly affecting construction firms and the entire supply chain, given the complex nature of construction projects, which involve numerous stakeholders like subcontractors, suppliers, and project managers. Supply chain disruptions are a leading cause of these delays. The construction sector depends on the prompt delivery of materials and equipment, and any interruption in the supply chain can lead to significant project setbacks. Factors such as natural disasters, transportation difficulties, or sudden regulatory changes can also disrupt material delivery.
Corruption
A report citing confidential interviews with industry players indicated that construction companies allot up to thirty percent (35%) of their budgets for infrastructure projects to pay off government officials and employees preventing them from causing any further delays. This causes companies to compromise other parts of the construction such as the quality of raw material, in order to accommodate the additional cost and to keep the projects moving.
Fifteen to thirty-five percent (15-35%) of the expenses were spent on “other costs of doing business” while construction companies have to maintain a net income margin of eight to fifteen percent (8-15%) no matter the costs. Since the budget for a project was already fixed, other parts of the project sometimes suffered for those “other costs”. Additionally, the poor quality of buildings, partly linked to corruption, makes the country vulnerable to natural hazards such as earthquakes and typhoons.
Other Emerging Issues and Challenges
Other risks and challenges include barriers to the implementation of green building practices, declining efficiency and performance of the industry, and occupational health and safety concerns. Occupational health and safety in construction projects is a critical concern, with a need for risk management and mitigation strategies. The rapid growth of construction projects has also led to the generation of high amounts of construction waste and excessive resource consumption, resulting in adverse environmental impacts. The industry's efficiency and performance have been declining, which has a significant impact on pollution. Moreover, there is a lack of infrastructure and connectivity that hinders inclusive growth and requires substantial investments.
The Future Outlook of the Construction Industry
Despite the challenges, the industry faces exciting prospects with key trends and potential opportunities that will ultimately determine its fate. While daunting, each of these hurdles presents an opportunity for growth and innovation. In a nation poised for significant transformation, the industry holds the key to economic progress, infrastructural advancement, and the adoption of sustainable practices.
Affordable housing. The government is ramping up efforts to address the shortage of affordable housing units in the country, particularly for the low-income sector. The government has launched several initiatives to address the shortage of affordable housing including the establishment of the Housing and Urban Development Coordinating Council, creation of a housing finance company, and implementation of various socialized housing programs. Additionally, the government has implemented tax incentives for developers engaged in building low-cost housing units and has also established a fund for housing financing.
Development of new urban centers. The government is pushing for the development of new urban centers outside Metro Manila to decongest the capital and spur economic growth in other regions. This includes investment in infrastructure and the creation of economic zones to attract investment and create jobs. Urban planning, in particular, is a critical aspect that will shape the industry’s future. However, the country is known for its unique set of laws and permits that can sometimes lead to delays and bureaucratic hurdles. Balancing this need for effective urban planning with environmental concerns, historical preservation, and infrastructure demands will require careful coordination.

Further, the industry faces challenges related to land use, zoning, and local government policies, which can vary from one region to another. These diverse regulatory frameworks demand a high degree of adaptability from construction firms, while they work effectively within this multifaceted regulatory environment. If the construction sector including the way the government handles business permits, were modernized and made digital, the value of the industry could reach up to P130 trillion from P2.3 trillion in 2018, which would increase the number of jobs in the industry. Without modernization, the industry’s value could go up to only P43 trillion in 2030.
Infrastructure development. The government aims to embark on a multi-billion dollar infrastructure development initiative that will upgrade the country's infrastructure, including airports, seaports, highways, and bridges by working with the private sector to finance, build, and operate these projects. With a rapidly growing population and the need for modernization, the government is setting aside substantial funds for ambitious development initiatives in infrastructure projects, which include road networks, public transportation, and utilities. These investments not only promise economic growth but also open doors for construction firms to secure major projects. Again, this rosy outlook is met with the real-world challenge of efficient project management and strict compliance with regulations.
Environment-friendly construction practices. The construction industry lags behind other sectors in its response to the problems of the environment. Construction companies should be encouraged to continuously search for inputs and ways of working which will minimize the negative impact of construction activity on the environment. There is a growing interest in green building and sustainable construction practices, as developers look to create projects that are more environmentally friendly and energy efficient. On its part, the government is promoting green building and sustainable construction practices through various initiatives, including the establishment of a green building council, the creation of a green building rating system, and the implementation of tax incentives for developers who build environmentally friendly projects. However, green building implementation is hindered by barriers related to social and economic aspects of sustainability. Additionally, the government is encouraging the use of renewable energy sources, such as solar and wind power, in construction projects.
Advancements in Construction Technology. The future of the construction industry is intricately tied to technological advancements. As the world embraces innovative construction methods and materials, the Philippines is poised to follow suit. Additionally, adopting these emerging technologies can enhance workers' and contractors' safety on construction sites. However, even when construction firms recognize the advantages of these technological solutions from design to execution, securing the necessary funding often presents a significant obstacle.
Integrating modern technology promises efficiency, cost-effectiveness, and safety improvements in the country. This includes the adoption of Building Information Modeling, drones for site inspection, 3D printing, and automation in construction processes. However, these advancements are met with the practical need for training the workforce and addressing infrastructure challenges, such as reliable internet access and a lack of funding. With some exceptions, the sector remains a technology laggard and is struggling to get to grips with data and analytics. Major technology players are already eyeing up the sector, seeking to use their data mastery and fast innovation to steal market share.
A Growing Focus on Safety and Compliance. The next few years in the Philippines would focus on safety and adherence to codes and standards in construction. The reason for this is a heightened awareness of improving employee welfare in the industry. Safety policies, conducting safety training and regulation at a high level, will be further implemented by both workers and investors. Moreover, as the industry expands, meeting these standards is critical not only for the well-being of workers but also for securing contracts and maintaining a positive reputation for the Philippines construction industry.
Skilled Labor and Workforce Development. As the demands of construction projects become more complex and diverse, the need for well-trained professionals also becomes more evident. From architects to tradespeople, the Philippine construction industry requires individuals with expertise in cutting-edge construction methods and technology. One solution is investing in training and education programs to bridge the skills gap, particularly focusing on younger, tech-savvy generations. Modernizing recruitment methods and offering competitive benefits can make the construction industry attractive to potential employees. Further, embracing technological advancements, such as automation and digital tools, can compensate for the workforce deficit and enhance productivity. In order to meet these demands, workforce development programs and educational initiatives have to emerge. A forward-looking approach recognizes that a skilled labor force is central to the industry’s success and the realization of its future potential.
Environmental, social, and governance (ESG): On the one hand, engineering and construction (E&C) companies aim to be at the frontline of delivering sustainable infrastructure, energy production, as well as carbon capture, biodiversity and other sustainability projects. On the other hand, the industry is a massive emitter of carbon, with concrete alone responsible for approximately eight percent of global CO2 annually. Hence, business leaders in the E&C sector must commit to their ESG goals through data-driven digital innovations, performance evaluation and risk management.
Throughout the 2020s the construction industry was responsible for building the next generation of sustainable infrastructure, including renewable energy facilities, and energy-efficient buildings with low lifetime carbon footprints and low water usage. The construction value chain has become equally sustainable, with a circular design, sensitivity to biodiversity, and strong support of local communities. Consultations with those impacted by projects will also result to sustainability.
Conclusion
The Philippine construction industry faces a pivotal juncture with both opportunities and challenges from labor shortages and technological adaptation to cost overruns, delays, and communication barriers. Factors like increased infrastructure investment and skilled workforce development will shape its future. However, the road ahead is not without its share of intricacies, particularly concerning the government’s complex regulatory landscape and the nuances of urban planning. This is why the Philippine construction industry must respond with resilience, adaptability, and a multi-sectoral vision to ensure a flourishing tomorrow for the country. The industry must navigate this path, balancing the allure of opportunities with the practicalities of execution to truly shape the future.
Fernando “Ronnie” S. Penarroyo specializes in Energy and Resources Law, Project Finance and Business Development. He is also currently the Chair of the Professional Regulatory Board of Geology, the government agency mandated under law to regulate and develop the geology profession. He may be contacted at fspenarroyo@penpalaw.com for any matters or inquiries in relation to the Philippine resources industry and suggested topics for commentaries. Atty. Penarroyo’s commentaries are also archived at his professional blogsite at www.penarroyo.com
References
“Corruption eats up 15-35% of construction firms’ budget”, Philippine Daily Inquirer, 09 January 2020, https://business.inquirer.net/286779/corruption-eats-up-15-35-%E2%80%8Dof-construction-firms-budget
Miyazaki, Emilou, “Hard Hats, Harder Challenges: The Hurdles Faced by Construction Consultancy Firms in the Philippines”, 05 February 2024, https://www.jcvassociates.ph/post/hard-hats-harder-challenges-the-hurdles-faced-by-construction-consultancy-firms-in-the-philippines
“What could the world of construction look like in 2030?”, KPMG Perspectives, 01 May 2023, https://kpmg.com/ph/en/home/insights/2023/05/construction-in-2030.html
“What does the future of the construction industry in the Philippines look like?”, https://metalexponents.com/blog/future-of-construction-industry-philippines/

Finding a Way Forward for PH Mining
It has been a busy time for earnest discussions on the way forward for the Philippine mining industry with mining being identified as one of five priority areas for investment and clear signals from the national government that it is recognized as a key driver for economic growth.
On 10 May 2024, the Department of Environment and Natural Resources (DENR) and The Stratbase Group held a forum entitled "Revitalizing the Philippine Mining Industry: A Pillar for Inclusive and Resilient Economic Growth and Development". In light of the powerhouse roster of speakers and panelists from the government, diplomatic corps, mining industry, and the private sector, as well as the breadth of the topics covered, it was fittingly dubbed a “mining summit”.
In the panel I moderated on “Addressing Philippine Mineral Agenda Bottlenecks”, we looked at the regulatory hurdles and bottlenecks hindering the advancement of the mining industry. Former Division Chief of the Mining Environment and Safety Division of the Mines and Geosciences Bureau (MGB), Engr. Michael Cabalda, reminded us that there is no need to reinvent the wheel as there is an existing and comprehensive Minerals Action Plan prepared by the Minerals Development Council back in 2005, with specific and detailed items to address the identified challenges. Even 19 years later, it is replete with implementable action items.
One concrete outcome of the event was the signing of the DENR-Mining Industry Joint Declaration [with the mining industry being represented by the Chamber of Mines of the Philippines, Philippine Nickel Industry Association, Philippine Mine Safety and Environment Association, and Philippine Mining and Exploration Association], which has the following objectives to push mining companies to go beyond mere compliance with the applicable laws and rules:
- Enhance regulatory frameworks to ensure the protection of biodiversity and the rights of local communities
- Promote the use of environmentally friendly technologies and rehabilitation of mining sites
- Encourage transparency and accountability in all mining operations
- Strengthen the enforcement of environmental laws and regulations
- Create a conducive and stable policy environment
Among the initiatives under the Joint Declaration are that: (1) the DENR shall station personnel in each active mine site for more efficient coordination and resolution of any concerns related to mine operation; and (2) mining organizations shall establish an Ethics Committee to oversee the environmental, social and governance (ESG) performance of their members to uphold and promote the highest standards of practice.
On 18 June 2024, I emceed the Sweden-Philippines High-Level Sustainable Mining Forum, with the theme “Pioneering the Green Transition: Advancing Sustainable Mining”. The Embassy of Sweden [led by Her Excellency Ambassador Annika Thunborg] and Business Sweden (also known as Team Sweden) have been working with the Philippine government in promoting the development of various industries. Having observed the renewed importance and emphasis that the Philippine government has placed on priority areas for advancement, including mining, Team Sweden hopes to build a stronger partnership around the mining industry, particularly revolving around sustainable mining.
We took away from the forum information and insights from Sweden in developing a Philippine mining industry that leverages technological innovations and promotes sustainability.
Sweden has long been a global leader and we are fortunate that it is adding its voice to the rejuvenated Philippine mining industry. It is the leading producer in the EU of 90% of iron ore and over 1/3 of zinc and lead. The mining ecosystem in Sweden [mines, mining equipment, services, steel and metal production], among others, supports 3% of Sweden’s national GDP, represents 8% of its exports, and accounts for 1.2% of total tax payments.
Most significantly, Sweden has a dedicated Ambassador for Sustainable Business, Cecilia Eckholm (one of the esteemed speakers at the event), who has been in the role since 15 January 2021 and is responsible for promoting the Swedish Government’s Sustainable Business agenda. She brings to the role a unique perspective, having previously served as Sweden’s Ambassador to Peru, another global leader in mining.
At the forum, several Swedish manufacturers and service providers, including Sandvik and Ericsson, presented a wide range of solutions for electrification, digitalization and automation that actively contribute to the green transition and to more efficient and safer mining operations.
We were also introduced by eminent speakers from Luleå University of Technology and the University of the Philippines to the “triple helix model” as it applies to the mining industry, where there is dynamic interaction among academia, industry and government, to encourage innovation and find research-based solutions to our local challenges.
With the many best practices shared by the resource persons from Sweden, I certainly look forward to closer collaboration between Sweden and the Philippines towards further developing a responsible, resilient and sustainable Philippine mining industry.
Patricia A. O. Bunye is a Senior Partner at Cruz Marcelo & Tenefrancia where she heads its Mining & Natural Resources Department and Energy practice group. She is also the Founding President of Diwata-Women in Resource Development, Inc., a non-government organization advocating the responsible development of the Philippines’ wealth in resources, principally through industries such as mining, oil and gas, quarrying, and other mineral resources from the earth for processing.























