Diokno eyes higher infra spending with 3 pct deficit


Posted at Jun 13 2016 05:38 PM | Updated as of Jun 14 2016 03:40 AM

Incoming Budget Secretary Benjamin Diokno on Monday reiterated his proposal to increase the budget deficit target to 3 percent from the 2 percent of the outgoing administration.

"Budget deficit is not necessarily bad," he said in an interview with ANC's Headstart.

In a separate interview with The Wall Street Journal, Diokno noted that the Philippines lags its neighbors in Southeast Asia in terms of public spending for infrastructure projects.

Sitting down with anchor Karen Davila, Diokno explained he will funnel the additional funds from a higher deficit to infrastructure spending, which is currently at 5%.

"If you use the deficit to invest in projects like new roads, new airports, etc.—that’s investment for the future. That’s good," he said.

"But if you use it to increase the salary of government workers, that’s bad," he added.

The 3% deficit in the GDP, said Diokno, is manageable and acceptable.

Meanwhile, he disagreed with Senator-elect Panfilo Lacson's proposed Budget Reform Advocacy for Village Empowerment (BRAVE) that mandates a specific amount be given to local government units.

"I think it’s not a good idea to assign a fixed amount because conditions change. And it’s very hard to assign, say 500 million, for a small province like Batanes or Camiguin," he said,

"Maybe, it could be a specific grant as opposed to a general purpose grant, which is IRA [Internal Revenue Allotment]. It could be embodied in the budget reform act," he added.