MANILA, Philippines — The Senate is set to conduct an inquiry into how the Duterte administration is financing its ambitious P8-trillion “Build Build Build” infrastructure program as the country’s debt edged up this year.
In filing Senate Resolution 759, Sen. Sherwin Gatchalian said there is a need to ensure “judicious, prudent, and sound economic planning” by the government. The committee on economic affairs, which he chairs, will lead the probe.
He said the status, sustainability and risks of projects under Build Build Build should be examined.
Gatchalian and Senate President Pro Tempore Ralph Recto said they were concerned about how the massive infrastructure program would be financed since much of the proceeds from the Tax Reform for Acceleration and Inclusion (TRAIN) have been already earmarked for social projects.
Recto said the administration should be wary of relying on Official Development Assistance (ODA) since it would bring the country deeper into debt.
He said the best way to fund “Build, Build, Build” is through the private sector or the public-private partnership (PPP) program.
“There is a need to closely monitor the debt obligations and modes of financing incurred and adopted by the Duterte administration for its Build Build Build Program to ensure transparency, accountability, and prudent use of loans and other financing methods utilized by the government,” Gatchalian said.
He said explained that 40 out of 75 approved infrastructure projects as of July 2017 will be funded through Official Development Assistance, which comprises the bulk of expenditures amounting to P1.006 trillion.
He said the total outstanding debt of the national government as of December 2017 reached P6.65 trillion, while around P329.05 billion was allocated for debt servicing in the 2018 General Appropriations Act
This month, the Bangko Sentral ng Pilipinas reported the country’s external debt-to-GDP ratio was 23.3 percent in 2017—a five-year low and a 5.6 percent decrease from the 28.9 percent ratio recorded in 2013.
“It is incumbent upon us senators, in the exercise of our power of the purse, to ensure that public funds diverted from health, education, and social services financing for debt services payment are properly appropriated,” Gatchalian said.
Build Build Build reportedly aims to fund P8 to P9 trillion worth of projects, resulting in annual infrastructure spending of P1.4 trillion.