The government has hiked its infrastructure budget for 2014 given the rise in spending requirements for reconstruction.
Budget Secretary Florencio Abad said next year’s infrastructure spending would be raised from 3 percent to 3.2 percent of gross domestic product (GDP).
This means state funds for public infrastructure would increase from P360 billion to P384 billion.
The government’s economic team “decided to raise the budget for infrastructure to help meet the needs for reconstruction,” Abad told reporters.
Later, economic officials will discuss whether the P24-billion increase in the infrastructure budget for 2014 should be raised further. The decision will be made as the need arises, the budget chief said.
The state decided to raise the state’s budget for infrastructure following the latest calamity to hit the country.
Supertyphoon “Yolanda,” which devastated the Visayas, resulted in property damage and income loss worth an estimated P571 billion.
In its assessment report, the National Economic and Development Authority (Neda) said that the government’s medium-term recovery plan would require funding of at least P361 billion.
The plan includes various projects and programs for recovery and reconstruction, including shelter for the affected families, reconstruction of government offices and facilities, and provisions for farmers and fishermen.
The funding requirement for the post-calamity recovery plan will be met partly by the government’s internal funds and by loans from foreign development institutions.
Hoping to gather more loan commitments, economic officials on Wednesday met with representatives of foreign lenders to present the government’s recovery plan.
Abad said several foreign lenders have already expressed their desire to aid the Philippines in its recovery.
The government expects to receive loan pledges in the coming weeks following the release of the recovery plan.
Earlier, the Asian Development Bank and World Bank offered loans worth $800 million and $500 million to help fund the reconstruction initiatives.
Abad also said that the Japanese government, through the Japan for International Cooperation Agency (Jica), recently offered $500 million in loans.
Neda Director General Arsenio Balisacan said the recovery plan would help ensure that the adverse impact of the calamity on the country’s economic growth would be temporary.
Based on the Neda’s estimates, the country’s growth could slow down to anywhere between 4.1 and 5.9 percent in the fourth quarter, from an average of 7.4 percent in the first three quarters.
The government expects the economy to bounce back from the slowdown in 2014, Balisacan said.