MANILA, Philippines - Public infrastructure spending is seen to more than double to P834.5 billion by 2016 as the Aquino government allocates more funds to build more roads, railways, airports and bridges to support its goal of inclusive and sustainable growth.
In a briefing yesterday, Budget and Management Secretary Florencio Abad said the government would continue to bolster infrastructure spending to further spur economic growth to as much as seven percent this year.
For this year, the Aquino administration expects to spend P299.4 billion for infra-related projects, equivalent to 2.5 percent of gross domestic product or GDP.
The amount excludes projects under the government’s Public-Private-Partnership program.
For next year, infrastructure spending is forecast to rise by 28.4 percent to P418.2 billion or three percent of GDP. The budget is expected to increase further to P601.5 billion and P834.5 billion by 2015 and 2016, respectively, corresponding to 4.1 percent and 5 percent of GDP.
The Philippines trails behind its Asian neighbors in terms of government infrastructure spending. According to the World Bank and the Asian Development Bank, the Philippines needs to jack up infrastructure investments to keep pace with its Asian peers in attracting foreign direct investments.
Across Southeast Asia, public works are being given priority by governments seeking to maintain growth amid the global economic downturn.
Improved infrastructure would contribute to reduced costs of doing business, increased market accessibility and enhanced competitiveness, the ADB said.
Higher tax collections and improved public finances trimmed the country’s budget deficit from a record in 2010, allowing the country to ramp up infrastructure spending. The Aquino administration is seeking more than $17 billion in infrastructure investments.
Abad said the government needs to step up infrastructure spending to attract money from overseas.
The Philippines draws the least amount of foreign direct investment among its Southeast Asian peers, according to the data from the World Bank.
Abad said the government would be more active in dispersing investments in line with its goal to create a conducive environment for business
The government, he said, would also accelerate its PPP program to help the country hit its goal of hitting 10 million tourists b 2016.