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Infrastructure

INFRATALKS: Infrastructure Trends And Opportunities In 2025

First published in InfraTalks, Aboitiz InfraCapital's monthly column in The Manila Times.

REPORTS that the Philippine economy will grow by 6.0 percent to 6.5 percent in 2025 feel like a promising step forward and offer a bright outlook for this year. From my observations in both Manila and during my recent provincial trips, it's evident that infrastructure plays a bigger role than we often realize. Infrastructure's role extends far beyond job creation and delivering essential public services. It is the backbone of modern economies, facilitating innovation and improving lives.

The Asian Development Bank and the World Bank predict moderate growth for the Philippines in 2025, underscoring the need for robust strategies to maintain momentum. Infrastructure development remains central to this strategy, with the government's "Build Better More" initiative keeping the momentum alive.

A significant highlight this 2025 is the allocation of P1.28 trillion in the national budget for infrastructure and capital outlays. While this reflects only a slight increase from 2024, it underscores the government's steady commitment to development despite fiscal constraints.

Several key trends will certainly shape the Philippine infrastructure landscape in 2025, reflecting global and local priorities:

– Green Infrastructure. Sustainability will remain at the forefront as climate change continues to demand urgent action. Investments in energy-efficient buildings, renewable energy, and climate-resilient designs are becoming priorities. Green infrastructure addresses environmental challenges and bolsters long-term economic resilience by fostering sustainable and adaptive communities.

– Digital Transformation. Digital infrastructure is a vital growth area, with investments in broadband networks, artificial intelligence, fintech, and e-commerce on the rise. Expanding digital access creates a multiplier effect, driving financial inclusion and stimulating innovation across industries. Enhanced connectivity ensures that even underserved areas can participate in the digital economy, bridging divides and unlocking new opportunities.

– Tourism and Hospitality Growth. The post-pandemic resurgence of tourism highlights the necessity for new and modern airports, highways, and seaports. Enhanced connectivity will stimulate both domestic and international travel, driving growth in the hospitality sector. Projects such as modernized airports and upgraded facilities will play a crucial role in sustaining this upward trend.

– Public-Private Partnerships (PPPs). The recently enhanced PPP Code, under Republic Act 11966, opens new pathways for private sector engagement. The Private Sector Advisory Council's Infrastructure Sector serves as a platform for collaboration, opening opportunities across various sub-sectors. This synergy ensures that private investment complements government efforts, accelerating project completion and efficiency.

While the prospects are promising, challenges persist. Inconsistent implementation of policies could impede timely project execution. Effective coordination and efficient project management will be critical in overcoming these obstacles and maximizing the impact of infrastructure development.

Additionally, global economic headwinds pose potential risks. Inflation and slowdowns in major economies such as the US and China could have far-reaching effects. Mitigating these shocks requires robust domestic policies and diversified strategies to ensure resilience.

The dynamics of 2025 as an election year also introduce additional complexities. While elections can temporarily halt state spending and construction activities, PPP projects benefit from exemption under the Commission on Elections' rules. This ensures the continuity of essential infrastructure development.

As a key player in the Philippines' infrastructure sector, Aboitiz InfraCapital (AIC) is well-positioned to drive this kind of transformative change discussed above, especially as it marks its 10th year anniversary.

By focusing on both physical and digital infrastructure projects, AIC is actively shaping the country's future. Notable initiatives include contributions to eco-friendly AIC Economic Estates, advancements at the Mactan-Cebu International Airport, providing basic services and improving quality of lives with water infrastructure projects; and sustained expansions of Unity Digital Infrastructure Inc.

AIC's approach centers on building transformative infrastructure ecosystems. This interconnected strategy creates greater value by allowing different components of infrastructure to complement one another. For instance, businesses within AIC Economic Estates benefit from the integrated systems of AIC Water, while our airports leverage digital solutions to enhance operations and customer experiences. This holistic approach ensures that communities served by AIC flourish for the long haul.

Collaboration remains at the heart of AIC's mission. Through partnerships under PPP frameworks, AIC collaborates closely with government and private entities to deliver impactful projects. Notable examples include the Laguindingan and Bohol-Panglao International Airport initiatives, as well as government projects like the Bureau of Immigration's forensic document laboratory at MCIA and the PinasBilis eBoss Package — borne out of AIC Economic Estates' collaboration with Lipa City — to spur ease of doing business. These efforts showcase AIC's commitment to creating infrastructure that is not only functional but truly transformative.

As we forge ahead, the Philippines must seize the opportunity to build infrastructure that addresses current demands while also anticipating future needs. By working together, we can turn aspirations into achievements, making 2025 a year of meaningful advancement for the Philippines.

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