NOW is the ideal time for the country to focus on infrastructure development while Philippine borrowings carry low interest rates, according to Budget Secretary Benjamin Diokno.
Long-term interest rates on loans contracted by the Philippines carry a 3 to 4 percent interest, Diokno said in a radio interview on Sunday. “Now, it is very ideal to focus on infrastructure,” the Cabinet official noted.
“I have never seen this interest rate before,” he added.
Twenty years ago, the Philippines fell into debt and could not even take out loans because interest rates were high, the Cabinet official noted.
There is nothing wrong with borrowing money as long as it will be invested in projects that will pay, he emphasized. “We will make sure the funds will pay for itself,” Diokno earlier said, noting the government is careful on spending.
The infrastructure program is envisioned to generate two million direct and indirect jobs. “We should focus on that. There are many jobs to be created from it,” Diokno said.
The target is to spend 5.3% of the gross domestic product on infrastructure.
The biggest project infrastructure project approved by the government is the Mega Manila subway system, which is expected to be completed in 2024. Estimated to cost P227 million, the project is to be funded by official development assistance.
Transportation Secretary Arthur Tugade said the subway system will allow “consistent travel time” of 31 minutes between Quezon City and Taguig City.