Close  

National government made record investment in 2018

By: - Reporter / @bendeveraINQ
/ 05:22 AM April 11, 2019

The government’s investments on infrastructure and other capital outlays reached a record-high P940.4 billion last year, which the Department of Finance said would help sustain a robust economic growth in the near term.

In an economic bulletin Wednesday, DOF Undersecretary and chief economist Gil S. Beltran said national government investment in 2018 jumped from P685.3 billion in 2017, citing data from the Department of Budget and Management (DBM).

ADVERTISEMENT

The share of national government investment to gross domestic product therefore rose to 5.4 percent from 4.34 percent of GDP in 2017, Beltran said.

“National government investment has been very efficient, with rates of return exceeding borrowing costs, currently at 5.9 percent per annum based on the 25-year Treasury bond rate. National government investment is strongly correlated with GDP growth; the economic rate of return is computed at 29.9 percent for the current quarter’s investment and 17.4 percent for the previous quarter’s investment. This compares favorably with 9.7 percent return for current quarter’s private investment and 7.9 percent for the previous quarter’s private investment,” Beltran said, citing a regression analysis using data from 2010 to 2018.

FEATURED STORIES

During project evaluations, the government uses as benchmark an economic rate of return of 15 percent.

Beltran attributed the high economic rates of return to “stringent” project evaluation being undertaken by the interagency Investment Coordination Committee for big-ticket projects, “open and transparent” bidding process for procurement and readiness of projects for implementation before the DBM allocates the budget.

Beltran noted many of the projects should have already been implemented years ago.

“The current congestion in the country’s roads and ports is evidence that the projects, once implemented, will have ready clientele,” he added.

For Beltran, “investment expansion has been the driving force of the economy in recent years—pushing up the country’s competitiveness and making up for previous decades of underinvestment.”

ADVERTISEMENT
Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Department of Finance, economic growth, Gil S. Beltran, Infrastructure, Investments
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.