Duterte infra spending swells to P1.64T
The Duterte administration has spent P1.64 trillion in infrastructure in its first two and a half years, already slightly exceeding the programmed amount as it fast-tracked the massive “Build, Build, Build” program.
Finance Secretary Carlos G. Dominguez III said actual spending on infrastructure and capital outlays during the first 10 quarters that President Duterte held office surpassed the P1.63-trillion program for the period.
As such, Dominguez said the share of infrastructure spending to the gross domestic product (GDP) climbed to 4 percent as of end-2018.
“Compare this with the economic investment of the previous administration. In all its six years, the previous administration spent only about P1.57 trillion in infrastructure and other capital outlays. This is just 78 percent of their programmed spending of P2.01 trillion for their entire term and is equivalent to only 2.3 percent of GDP,” Dominguez said, referring to the term of former President Benigno Aquino III.
For Dominguez, infrastructure development helped boost economic growth.
“Our aggressive spending on infrastructure demonstrates that the lead agencies in the ‘Build, Build, Build’ program are moving faster than expected. The old problem of absorptive capacity has been solved,” the finance chief added.
Under “Build, Build, Build,” the government plans to start 75 “game-changing” flagship projects to usher in “the golden age of infrastructure” and bring the infrastructure spending-to-GDP ratio to 7 percent, at par with our Asean neighbors.
“By the end of the Duterte administration’s term, we expect to invest over P8 trillion in the infrastructure program. By then, we would be able to close the country’s infrastructure gap. This represents major pump-priming for the economy. We have already seen private enterprises prepare to participate in the ‘Build, Build, Build’ program by importing capital goods from abroad. While the massive importation widened the balance-of-trade deficit in the short term, the capital goods that have been acquired will continue to create wealth for our economy for many years to come,” Dominguez said.
“The ambitious ‘Build, Build, Build’ program is made possible by the fiscal space provided by many years of fiscal discipline. That fiscal discipline allowed us to work down our debt to eminently manageable proportions and achieve sound credit ratings that allow us to borrow at more economic costs. International confidence is seen in the willingness of our development partners and foreign governments to help finance the large infrastructure projects,” he added.
Dominguez reiterated that even as the government would borrow more through official development assistance (ODA) coming from multilateral lenders and loans from China and Japan, prudent borrowing would keep debt manageable.
“It is not true that the infrastructure program is mainly driven by financing from China. As of 2018, our total project debt exposure to China is only 0.66 percent of our total debt exposure. Comparatively, our total project debt to Japan is 9 percent of our total debt exposure,” Dominguez said. —BEN O. DE VERA
