Palace urged to jack up infra spending in ’16

PUBLIC Works Secretary Rogelio L. Singson has urged the Aquino administration to further ramp up infrastructure spending to as much as 7 percent of gross domestic product (GDP) next year, as the government needed to fast track such developments to be able to keep up with the country’s robust economic growth.

Such an amount should not only cover the construction of roads, bridges, ports, school buildings and flood management infrastructure, but also rail projects which, Singson said, were a necessary part of the roadmap for transportation for the National Capital Region.

As it is, the government’s infrastructure spending is already at 5 percent of GDP this year, while next year’s budget approximates the same share in GDP at about $17.4 billion.

“To achieve inclusive growth and to improve the country’s global competitiveness, the Philippines needs to invest in critical infrastructure. The Aquino administration realized we had been under investing in past decades in basic public infrastructure, which are necessary to reach out to the marginalized sectors, particularly in the rural and agricultural areas,” Singson said at the Innovation in Infrastructure Congress Tuesday.

Singson said that from $3.8 billion or a mere 1.8 percent of GDP in 2010, investments in infrastructure had surged to about $13.5 billion this year, which would further increase to $17.4 billion in 2016. Almost half of the allocation for infrastructure next year represented the budget of the Department of Public Works and Highways (DPWH) at P358 billion.

“We could not jump from 1.8 percent to 4 percent of GDP as quickly as we wanted to, due to the massive overhaul of government polices and procedures in the first two years of the administration. [This move] was meant to avoid government fund leakages and to address absorptive capacity constraints,” he said.

However, further increasing infrastructure spending to 7 percent of GDP from the current 5 percent may be relatively easier, according to Singson, because the procedures have already been streamlined and potential fund leakages have been plugged.

The next administration, he said, should also target for an even higher infrastructure spending of about 10 percent of GDP to help sustain the economic growth momentum.