The ongoing series of fiscal and governance reforms is an essential component of the revised five-year Philippine Development Plan to ensure that public spending will create jobs and help further strengthen the economy’s resilience against natural shocks, Economic Planning Secretary Arsenio Balisacan said.
Explaining the Philippines’ economic program at the First High-Level Meeting of the Global Partnership for Effective Development Cooperation in Mexico last week, Balisacan said the government is seeking to widen the tax base, prosecute and jail tax evaders, raises taxes on “sin” products, and fight corruption.
“These will help meet the country’s spending priorities in social development, infrastructure, and especially developing resilience against natural shocks,” said Balisacan, who is also director general of the National Economic and Development Authority (NEDA).
He said those policies and programs created wider fiscal room that provided enough flexibility to sustain the momentum of increased spending and improved budget allocation.
“In turn, these allowed the expansion and improvement of investments in health, education, social protection, and infrastructure, which are known to be binding constraints to poverty reduction and inclusive development,” he said.
Government spending on infrastructure and other capital outlays has significantly increased in recent years, channeled specifically to projects such as the construction and rehabilitation of roads and bridges, enhancement of tourism access, and irrigation to support the agriculture sector.
Under the updated five-year plan, the government aims to boost infrastructure spending to 5 percent of gross domestic product (GDP) by 2016.
Balisacan highlighted critical factors that successfully link resource mobilization with public expenditure needs in the Philippines.
“First, there is a need for a credible government that ‘puts its money where its mouth is.’
Next, a plan should provide a clear set of targets that are relevant, meaningful, and can be monitored to measure and report the government’s performance and accountability. And we addressed this through the Updated PDP. Finally, a country needs a development budget that has predictable and sufficient resources to support the implementation of the Plan,” he said.
The Plan states that infrastructure spending is necessary to catalyze development in key sectors such as agriculture, industry and services, information technology and business process management, as well as energy.