Zero underspending: Philippines 2018 infrastructure spend tipped to hit 6.2%

Zero underspending: Philippines 2018 infrastructure spend tipped to hit 6.2%

The Philippines government spending on infrastructure may have hit 6.2 per cent of the country’s economy in 2018, a continuation of  the fast-tracked spending  under President Rodrigo Duterte’s ambitious “Build, Build, Build” programme.

Budget Secretary Benjamin E. Diokno said the share of infrastructure spending as measured against gross domestic product (GDP) increased to 6.3 percent in 2017, and last year may have hit 6.2 percent, almost triple the 2 per cent average between 1986 and 2016.

Between January and November 2018 national government total spending amounted to PHP3.1 trillion (about US$58.97 bln), a 24 per cent increase from PHP2.5 trillion ($47.4 bln) in the same period of 2017.

Zero under-spending

With total expenditure for 2018 expected to reach PHP3.37 trillion ($63.9 bln), Mr Diokno noted that last year’s 11 months’ figures “increased the likelihood of zero under-spending for 2018”.

“Past neglect may no longer be corrected, but through Build, Build, Build and this renewed interest in infrastructure, things are definitely looking up as the Philippines continues to surge as the fastest-growing economy in the fastest-growing region in the world — Benjamin Diokno
Benjamin Diokno: “things are definitely looking up” Department of Budget and Management

In 2017 the underspending rate improved from about 3.6 per cent of the 2016 budget to 3 per cent, with the government spending PHP2.824 trillion ($53.6 bln), some 11 per cent higher than than the PHP274.4 billion ($5.2 bln) spent in 2016.

By comparison in the two years prior to Mr Duterte’s administration underspending came in at 12.8 percent in 2015 and 13.3 per cent in 2014. “President Duterte has shown a much better job than his peers” in lowering the rate of underspending”, he said.

Claiming that the the fast-tracking of projects is an attempt to make up for lagging investment by previous administrations “that severely dragged [down] the Philippines’ economic performance”, Mr Diokno added that 44 of 75 flagship infrastructure projects under President Duterte’s ‘BBB’ programme have “begun implementation”.

Critics, however, claim that the term “begun implementation” is being applied to projects that are nothing more than sketches, or in some cases just ideas (See: Philippines infrastructure: Build, build, build… but not so fast)

Despite the delay in the passing of the 2019 national budget, Mr Diokno said that the government can still achieve its target of economic growth of 7-8 per cent this year, with infrastructure spending slated to represent 6.8 per cent of GDP. By 2022 infrastructure spending is slated to be 7.0 per cent of GDP.

Noting that between 2009 and 2017 the Philippines’ overall infrastructure rank had dropped from 94th globally to 112th, Mr Diokno said “past neglect may no longer be corrected, but through Build, Build, Build and this renewed interest in infrastructure, things are definitely looking up”.

 

Feature photo Department of Budget and Management

 

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Stella-maris Ewudolu

Journalist at AEC News Today

Stella-maris graduated with a Bachelor of Arts, Education from Ebonyi State University, Nigeria in 2005.

Between November 2010 and February 2012 she was a staff writer at Daylight Online, Nigeria writing on health, fashion, and relationships. From 2010 – 2017 she worked as a freelance screen writer for ‘Nollywood’, Nigeria.

She joined AEC News Today in December 2016.

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