The Philippines is increasing its infrastructure spending target to over 5% as a percentage of economic output by 2016 in light of reconstruction in areas damaged by Typhoon Yolanda and the killer earthquake in Bohol, a Cabinet official said. “Because of the needs for recovery and reconstruction in the Visayas, we'r
The Philippines is increasing its infrastructure spending target to over 5% as a percentage of economic output by 2016 in light of reconstruction in areas damaged by Typhoon Yolanda and the killer earthquake in Bohol, a Cabinet official said.
“Because of the needs for recovery and reconstruction in the Visayas, we're looking at a higher number, more than just 5% by 2016,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters in a briefing, referring to the ratio of infrastructure spending to gross domestic product (GDP).
There is a need to “move forward” given the “reconstruction we need to undertake not only for the Yolanda affected areas but also for the earthquake-affected areas,” Balisacan said.
The World Bank has prescribed an infrastructure spending-to-GDP ratio of at least 5 percent to sustain economic growth and attract investments that create jobs.
The Philippines won investment grade status from all three major debt-watchers this year, prompting the Aquino administration to go for the prescribed infrastructure spending-to-GDP ratio by 2016.
Under the medium-term fiscal program unveiled early this year, infrastructure spending was pegged at 2.5% of GDP for the year, 3.3% for 2014, 4.1% for 2015, and 5%for 2016.
Also this year, the state earmarked PHP$ 268 billion (USD$ 6 billion) from the state coffers to boost the transport network.
“Accelerating infrastructure development,” Balisacan noted, is one of the “spatial and sectoral dimensions as imperatives” under the administration's Philippine Development Plan Midterm Update for 2014 to 2016 to be released in January.