Gov’t allots P420 B for infra next year

MANILA, Philippines - The Aquino administration plans to spend P420 billion next year to boost infrastructure spending to 3.5 percent of the country’s  projected gross domestic product (GDP) to keep pace with its economically more successful neighbors  and sustain its growth momentum.

Budget Secretary Florencio Abad said infrastructure spending would continue to be one of the key components of President Aquino’s economic reform roadmap.

Infrastructure spending has been growing by double digit in the past several months but remains below three percent of the country’s total economic output compared with the average of five percent for Southeast Asian countries.

The government aims to raise the allocation for infrastructure to P420 billion next year from the original P360 billion given the massive reconstruction plan for Eastern Visayas which was severely damaged by Super Typhoon Yolanda.

Last year, infrastructure spending accounted for only 2.4 percent of GDP, one of the lowest in Southeast Asia.

GDP is the value of a country’s overall output of goods and services in a given year.

The government has earmarked around P130 billion for the reconstruction and rehabilitation plan of the storm-ravaged areas.

National Economic and Development Authority chief Arsenio Balicasan said the sharp increase in infrastructure spending next year would result in lower cost of transporting goods and people;  support agricultural productivity, reduce disaster risks, attract investments and boost employment.

Abad said theirs is a big possibility that the country would exceed the five percent infrastructure spending to GDP target by 2016 given massive reconstruction efforts post-Yolanda.

By 2016, planned infrastructure spending is estimated to reach more than P820 billion.

Abad said more infrastructure investments would  help support the growth of key industries, including the country’s agriculture, tourism and Business Process Outsourcing (BPO) sectors.

These include rehabilitating and developing arterial farm-to-market roads-especially in rice-and-corn, coconut, and high-value crop areas-and improving road access to tourism zones, and upgrading key airports and seaport hubs in tourist destinations.

The government is also bent on  upgrading and expanding rail and metro-rail transport systems and bus stations in urban centers.

“While we funnel investments into industries with high growth potential, we will continue devoting resources to programs and projects that support our long-term development agenda. We’re also looking at ways to support emerging, small-to-medium sized industries, as well as bringing down the cost of doing business in the country,” Abad earlier said.

The World Bank and the Asian Development Bank have been prodding the Philippines to increase public infrastructure spending to match the average level of expenditures for roads, bridges, and railways in other Southeast Asian nationals and lure more foreign direct investments.

The estimated $2 billion in FDIs that the Philippines cornered last year paled in comparison with those of other Southeast Asian countries like Indonesia.