The World Bank wants the Philippines to jack up spending for infrastructure, adding that it is willing to extend whatever amount of loan the government will need to achieve the agenda of investment generation and job creation.
The country’s yearly public infrastructure spending stands at an amount equivalent to only 2.6 percent of the gross domestic product. The World Bank suggests the gradual increase in spending to reach at least 5 percent of GDP by 2016, or at the end of the Aquino administration’s term.
Motoo Konishi, World Bank’s country director for the Philippines, on Tuesday said the country needed to spend an amount equivalent to 5 percent of GDP on road networks, irrigation, power and other infrastructure projects to generate the amount of investments needed to achieve the government’s job creation and poverty reduction goals.
He said infrastructure projects aimed at boosting the country’s tourism and agriculture sectors should be the priority. The World Bank believes that with ample support, these sectors can create a significant number of jobs within a short period.
“We [the World Bank] are willing to extend whatever amount the finance secretary needs to borrow,” Konishi said in a video press conference while sitting in a panel with Finance Secretary Cesar Purisima and other government officials during the last day of this year’s Philippine Development Forum held in Davao City.
“Underpinning inclusive growth is better infrastructure,” he added.
In the forum, participants identified priority areas for development. The results of the discussions are expected to guide the government and lending organizations in deciding what projects and programs to put up and support.
Konishi said the Philippines was no longer the “sick man” of Asia, given its much improved macroeconomic fundamentals. However, he said a lot of work had to be done to translate growth to actual poverty reduction.
In 2012, the Philippine economy grew year-on-year by 6.6 percent, one of the fastest in Asia. Despite this, the latest poverty incidence level is believed to have remained significant.
“For growth to be truly inclusive, it is important that more and better jobs are created. In the next three years, the country needs to put greater focus on creating the environment for the private sector to generate jobs, especially agriculture and tourism,” Konishi said.
The World Bank official stressed the importance of speed in the implementation of infrastructure projects so that the desired results were obtained sooner rather than later. He said the decision of the World Bank and other lenders to approve additional loans for infrastructure projects partly depends on the ability of the government to fully utilize the funds for approved projects.