The economy can sustain 7 percent growth over the medium term on account of the government’s infrastructure program, Finance Secretary Carlos Dominguez 3rd reiterated on Friday.
Investments in the P8.4-trillion “Build Build Build” program will increase to about 7 percent of gross domestic product (GDP), higher than the average in the Association of Southeast Asian Nations (Asean) region, he added.
“We retain the 7 percent growth rate target for the year, spurred by the investment spending in the infrastructure program. We believe this growth rate is sustainable well into the medium term,” Dominguez said in a statement.
Investing in infrastructure, he noted, has a high multiplier effect.
“It creates construction jobs in the short term and manufacturing jobs in the long term. It improves land prices, assists in raising our agricultural productivity and encourages dispersal of our industries into the regions,” Dominguez said.
He claimed that under-investment had led to a deterioration in the quality of Philippine infrastructure, which now lags Asian neighbors.
“While we grappled with the debt crisis and imposed austerity, our investment in new infra fell to nearly half the regional average. Over the past year, we have doubled spending on infrastructure as a percentage of GDP. In the coming years, we plan to increase economic investments to about 7 percent of GDP, higher than the regional average.”
The Finance chief said the Philippines could no longer postpone infrastructure modernization and increased investments in human capital development given the changing Asean economic landscape.