THE government’s ambitious six-year infrastructure spending program of P8.4 trillion could boost the country’s real gross domestic product (GDP) by 3.4 percent and translate to 1.06 million additional jobs every year until 2022, the National Economic and Development Authority (NEDA) said.
“Assuming a public infrastructure spending baseline of 5.1 percent of GDP this year, and gradual increase of public infrastructure spending to 7.4 percent of GDP by 2022, we estimate… [that the impact]would be a little bit higher than 5 percent by 2022,” Socioeconomic Planning Secretary Ernesto Pernia said during the first “Dutertenomics” forum held at the Conrad Hotel in Pasay City on Tuesday.
Public infrastructure spending would also generate additional direct and indirect employment of about 1.7 million by 2022 from an estimated 106,824 additional jobs in 2017, said Pernia, who is also the NEDA director general.
“The impact will also be felt across a wide range of sectors,” Pernia added.
Under this ambitious program is the Three-Year Rolling Infrastructure Program (TRIP). The 2018-2020 TRIP will have an indicative investment requirement of P3.6 billion, bulk of which will be for transportation projects (P2.32 billion), social infrastructure (P636.65 million), water resources (P239 million), administrative buildings (P197 million), information and communications technology (P112.85 million), energy (P40.11 million), and others (P5.66 million).
TRIP will ensure that the hard budget ceilings of government agencies are optimized and utilized in funding infrastructure programs that are responsive to the priorities and strategies in the Philippine Development Plan (PDP), NEDA said.
According to NEDA, TRIP promotes the optimal use of public resources for infrastructure development by assuring fund allocation for well-developed and readily-implementable projects for three years, thus allowing the government to address gaps in the infrastructure sector, including pending projects from previous years.
Some of these pending projects are 4,710 kilometers of national roads that need to be paved, 366,014 units of socialized housing that are up for construction, and 1.2 million hectares for irrigation.
New revenues crucial
However, accelerating spending on infrastructure would require additional revenue measures that could only be generated via the Comprehensive Tax Reform Program (CTRP), Finance Secretary Carlos Dominguez 3rd said.
In his keynote address during the forum, Dominguez said, “The CTRP is an indispensable component of the Duterte administration’s economic strategy. It is an audacious strategy that seeks to lift our country to upper middle-income status by 2022 and high-income status by 2040.”
He said now is the time to move decisively in carrying out this strategy given the convergence of positive factors that are conducive to high and inclusive growth, such as the economy’s low-interest rate regime, excess liquidity, benign oil prices, investment-grade credit rating, a young, vigorous work force and the strong support of countries like Japan and China.
“Fortunately, we have a leader capable of much audacity. We have a leader of vision and intense love of country. All the favorable factors are present. It is time now for a breakout,” Dominguez said.
This reform agenda, he said, includes an infrastructure buildup that will entail trillions of pesos in investments that will have to be funded by tax revenues.
“This means we have to introduce new revenue measures that will not only compensate for lower tax rates but also fund the massive infra program that commences now,” he added.