Gov’t expects big drop in poverty in 2014

AFP FILE PHOTO

The Aquino administration expects the P399 billion earmarked for infrastructure development next year to result in a more significant drop in the country’s poverty incidence.

Economic Planning Secretary Arsenio Balisacan said that with the proposed infrastructure budget for 2014, which is 35 percent higher than the P295 billion set aside for this year, the government could substantially boost employment and, in the process, increase household incomes.

Balisacan said the investments to be generated by better infrastructure such as new roads, bridges, airports, farm and power facilities would also help promote inclusive growth.

“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,” Balisacan said.

The big jump in infrastructure budget intended for 2014 comes amid criticisms that the Philippines, despite having posted robust economic growth recently, has failed to lift a significant portion of its population out of poverty.

The poverty rate in the country stood at 27.6 percent in the first semester of 2012, one of the highest in Asia. This was slightly better than the 28.6 percent in 2009 and 28.8 percent in 2006.

The minimal change in poverty incidence was despite the favorable performance of the Philippine economy, which was one of the few countries that evaded contraction in 2009 when the global economy plunged into recession.

The Philippines also recently was described as a bright spot amid a relatively lackluster global economy after the country grew by a higher-than-target 6.8 percent last year and 7.8 percent in the first quarter this year to become Asia’s fastest-growing economy.

Balisacan has expressed confidence that allocation of enormous budget for infrastructure would help fast-track the reduction of poverty incidence.

The amount allocated for infrastructure in the proposed 2014 national budget is equivalent to 3 percent of the projected gross domestic product for the year.

Balisacan said the Aquino administration intended to continue substantially increasing the annual budget for infrastructure until this hit P820 billion, or 5 percent of GDP, by 2016. Such an amount is expected to account for a quarter of the national budget.