Infrastructure spending to hit 7% of GDP – Diokno
Philippine construction will experience the “golden age” of the industry in the next six years as a result of the government’s plan to ramp up investment in hard public infrastructure, Department of Budget and Management (DBM) Secretary Benjamin Diokno said.
Infrastructure spending will rise from a low 5 percent to a high of 7 percent of gross domestic product (GDP) Diokno told the 6th general membership meeting of the Financial Executives Institute of the Philippines (Finex) in Makati City on Wednesday.
“For too long, public infrastructure has been neglected. As a result, the Philippine economy is deficient in all types of infrastructure—roads and bridges, ports and airports, railways and urban transit systems, irrigation systems and water systems. To address this, we will hike infrastructure spending from a low 5 percent to a high of 7 percent of GDP,” he said.
Next year, the government plans to spend more than P890 billion for public infrastructure, he said, noting that specific infrastructure projects that will be undertaken simultaneously in all regions—developed or lagging—include small, medium and large-scale ventures.
“The next six years will be The Golden Age of Philippine construction, both public and private,” he said.
The P890 billion-plus planned spending for “pure” infrastructure represents 5.2 percent of next year’s P3.35 trillion national budget, 41 percent higher than the P631.9 billion target for this year.
Diokno explained that pure infrastructure spending excludes disbursements to other capital outlays, which involves allocations for new buildings and purchasing airplanes, police vehicles and military goods.
However, Diokno also pointed out that it would take 10 years of “continuous buildup” of projects to address the infrastructure gap.The country, he said, is severely handicapped by the lack of infrastructure.
“Right now, we have the MRT, LRT, LRT2, and then we have the MRT 7. Maybe, we will need three or four more lines, and then we need the PNR (Philippine National Railways) modernized,” he said.
“The airport, within the year, we have to make up our minds, we have to decide where it will be. Clark or Sangley. I think those are the option, unless someone will come up with unsolicited advice. In the meantime, there should be a dedicated highway from Clark to Makati, I think that’s possible,” he added.