If time is money, then the Philippines is losing P2.4 billion a day in potential income due to traffic congestion that eats up time that could have been used for productive pursuits, Socioeconomic Planning Secretary Arsenio Balisacan said.
Balisacan, National Economic Development Authority (Neda) chief, was quoting a study by the Japan International Cooperation Agency (Jica) that the government has tapped to help come up with a transportation development road map for the country.
“It’s a no-brainer that we need to boost infrastructure. We have a huge backlog in almost all types of infrastructure,” Balisacan said, adding that the government intends to invest in more roads, bridges, railways, airports, and sea ports during the remainder of President Benigno Aquino III’s term.
Compared with neighboring countries, the Philippines spends significantly less on public infrastructure at only 2.5 percent of gross domestic product (GDP) in 2012, against the 5 percent average spending in other Southeast Asian countries.
Balisacan said that the Aquino administration wants to boost public infrastructure spending to at least 5 percent of GDP by 2016 to compete with other countries for foreign investments.
Earlier this week, Budget Secretary Florencio Abad said the government intends to increase its budget for infrastructure from about P400 billion last year to at least P800 billion in 2016, to reach the target of 5-percent infra spending to GDP ratio.
Abad said the government has embarked on an infrastructure rationalization plan under which government processes are streamlined to fast-track infrastructure projects.
“We are accelerating our infrastructure spending and adjusting procedures to ensure (the) timely implementation of infrastructure projects and to improve the absorptive capacity of government agencies,” Abad told the Inquirer.
Absorptive capacity refers to the capability of government agencies to spend allocated funds on time.
One administrative reform that the budget secretary cited is the adoption of the advance procurement system that would allow line agencies to start procuring goods and services needed for infrastructure projects scheduled for 2014.
Another reform, Abad said, is the streamlining of payment processes to help government agencies settle their obligations to contractors and suppliers within a shorter period of time.
The budget chief also said that the President has instructed the Department of Public Works and Highways to take over the supervision of infrastructure projects of other government agencies—such as health facilities under the Department of Health—to help complete them within a shorter time frame.
“There is a huge room for increased infrastructure spending, and we want to maximize it,” Abad said.
The Department of Budget and Management on Friday reported that public infrastructure spending rose year on year by 35.6 percent to reach P104.6 billion from January to May this year. The amount was equivalent to 2.6 percent of estimated GDP for the period.