Public infra spending seen as game changer
MANILA, Philippines - Public infrastructure spending would be the game changer for the Philippines in the medium term, US financial giant Citi said in a report.
In a research paper titled Pan-Asia Road Ahead 2013, Citi encouraged the Philippines to make good on its P325-billion, multi-year flood works and drainage program.
It likewise urged on the Philippines to get its Public-Private Partnership (PPP) program off the ground, which has the spending potential of P233 billion.
“We believe this may lift the country’s investment to gross domestic product (GDP) ratio that will eventually accelerate economic growth,” Citi said.
It added that higher per capita GDP could spur non-farm employment, stronger discretionary spending and fiscal consolidation that will enhance the private investment outlook.
However, potential risks include delays in project implementation, profit-taking due to premium valuations, strong peso weighing on consumption, higher inflation as economy speeds up, and external downside factors.
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