The P399-billion proposed budget for public infrastructure projects in 2014 may remove constraints to inclusive development, according to the National Economic and Development Authority (NEDA).
In a statement, Socioeconomic Planning Secretary Arsenio Balisacan said that the amount is 35 percent more than the P295- billion appropriated this year for infrastructure development.
“The dramatic surge in infrastructure spending next year will lower the cost of transporting goods and people, support agricultural productivity, reduce risks from disasters, and generate economic investments and employment. The proposed projects will ultimately benefit the poor and vulnerable sectors,” he said.
Balisacan added that most of the infrastructure projects will support the government’s Transport Infrastructure Development Program, which is a P180-billion convergence initiative led by the Department of Transportation and Communications and supported by the departments of Public Works and Highways, Agriculture, and Science and Technology and the Metropolitan Manila Development Authority.
“The overall allocation of P399 billion is about 3 percent of our gross domestic product target for 2014. By 2016, planned infrastructure spending will amount to about P820 billion, or approximately 5 percent of GDP,” he added.
Earlier, the Department of Budget and Management said that the government is focusing next year’s budget for economic services to infrastructure spending.
“We intend to channel more investments into infrastructure development and other public services that are pivotal to our pursuit of rapid, sustained and inclusive growth. At the same time, we’re intensifying our efforts at refining our social welfare and development programs, in line with the administration’s goal of strengthening our own human capital,” Budget Secretary Florencio Abad said.
P400M for studies
The proposed 2014 national budget also earmarked a P400-million special purpose fund for the preparation of feasibility studies on infrastructure, the NEDA said.
“Because of the urgency to implement infrastructure projects, we need to speed up the project cycle without sacrificing quality. We want the government to have the flexibility to initiate the preparation of feasibility studies, so we can accelerate project implementation,” Balisacan said.
Balisacan, who is also the NEDA director general, added that with the fund, the country can ultimately find the cheapest source of financing that best serves the interest of the government and do not need to depend on donor-driven feasibility studies.
The Cabinet official cited the 2012 Official Development Assistance Portfolio Review Report, which identified start-up delays and high-cost overruns as among key issues in implementing ODA-funded projects. The NEDA submitted the report to Congress in June this year.
“The P400-million feasibility studies fund can actually save the government money,” he said.
The NEDA official, however, said that the special purpose fund is intended only for projects listed in the government’s Public Investment Program (PIP) and excludes those for public-private partnership (PPP) implementation, as stated in the special provisions of the proposed 2014 budget.
“Since the NEDA will administer the fund, we will be limiting it to high-priority projects that we think will have the most impact on inclusive growth and development. We will soon submit a list to the Department of Budget and Management, the House Committee on Appropriations and the Senate Committee on Finance,” he said.