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By Darwin G. Amojelar, Reporter
THE Philippines is likely to miss its medium
term investment goals, according to a document obtained by The
Manila Times.
A Development and Budget Coordinating Committee
(DBCC) document showed that the investment as a share of the
economy, as measured by the country’s gross domestic product
(GDP), would average 20-percent for 2008 to 2010.
Under the Medium-Term Philippine Development
Plan for 2004 to 2010, the government aimed at raising the
investment-to-GDP ratio to 28 percent in 2010 from 19 percent at the
start of the planning period.
The DBCC is the inter-agency body that sets the
country’s macroeconomic targets.
The document showed that national government
spending on infrastructure this year would amount to P79.36 billion.
Of this amount, the transport sector would receive P36.5 billion;
the power sector, P20.32 billion; water, P14.44 billion; social
infrastructure, P5.66 billion; information technology, P2.2 billion;
and property development, P214.2 billion.
“The mining utilities, construction and
transportation subsectors would benefit the most from these
projects,” the document said.
For next year and 2010, the government plans to
spend about P64.26 billion and P71.45 billion, respectively, for
infrastructure alone.
These figures are lower than the P100 billion a
year target set in the economic blueprint.
A World Bank report earlier said that over the
last 15 years domestic investment has remained stagnant in real
terms and consistently declining as a share of GDP. The country’s
domestic investment fell by 80 percent, while foreign investments
decreased by 15 percent, the Washington-based lender said, adding
that 40 percent of the overall decline was due to lower
construction.
The multilateral lender said private investment
fell despite rising growth because the private sector found serious
impediments to investing in the poor transportation network, the
declining quality of education, and the high cost of inputs,
particularly electricity.
“Between 2000 and 2004, private
investment—deterred by political instability and systemic
uncertainties—did not respond to higher growth, and private sector
credit fell by 40 percent as a share of GDP,” the World Bank said.
In 2006, investment continued its decline as a
share of GDP to below 15 percent.
In its 2007 to 2009 Investment Competitiveness
Report, the United Nations Conference on Trade and Development (Unctad)
ranked the Philippines at 28th out of 41 countries, lagging behind
four other Southeast Asian economies.
Neighboring countries like Vietnam, Thailand,
Malaysia, and Indonesia ranked sixth, 12th, 14th, and 15th,
respectively.
Unctad estimated that the Philippines netted
$2.5 billion worth of investment last year, up 8.6 percent from $2.3
billion in 2006.
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