Economic team justifies 2022 infrastructure budget of Php1.18 trillion

THE country’s economic managers on Thursday defended the P1.180-trillion allocation for infrastructure programs of the Duterte administration for 2022 amid the Covid-19 pandemic.

During the briefing on the  P5.024-trillion National Expenditure Program (NEP) for 2022,  Socioeconomic Planning Secretary Karl Kendrick Chua, Finance Secretary Carlos Dominguez III,  and Budget and Management Undersecretary Rolando Toledo said the “Build, Build, Build” program will help to create more jobs, and, in turn, stimulate growth and boost domestic consumption.

“The infrastructure spending is very crucial to our recovery given the high multiplier effect. Since 2019, except for 2020, we have been programming at least a trillion-pesos worth of infrastructure and this will continue in the medium term for 2022,” said Chua, also director general of the National Economic and Development Authority.

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“The infrastructure budget is programmed at P1.2 trillion, which will allow us to create around 1.5 million plus additional jobs in the construction sector,” he added.

According to Chua, the Philippine economy is estimated to lose around P73.6 billion a week due to the imposition of the modified enhanced community quarantine (MECQ). He said 310,000 workers were also affected by the MECQ.

Absorptive capacity

To feel this multiplier effect, Chua, however, said government agencies must ensure they can spend the funds they get from the national government by improving their absorptive capacity.

To boost economic recovery and provide a modernized public transport system, the DBM said the government will continuously invest in the BBB Program.

Of the 2022 NEP, the budget agency said P1.180 trillion is provided for the infrastructure 
budget.

For his part, Secretary Dominguez said the government will continue these investments to achieve a strong economic rebound in the remaining months of the administration.

“In the remaining period of the President’s term, we will rapidly modernize governance, [we will] continue public investment and pursue market-friendly reforms to achieve a strong economic rebound,” Dominguez said.

“With this high multiplier effect, we will maintain the pace of our BBB program. Our projected infrastructure spending will remain above 5 percent of the GDP until the end of the President’s term,” the Finance secretary added.

Actual infrastructure spending in 2020 has reached just P681 billion, while the 2021 infrastructure budget, for all agencies, reached P1.2 trillion.

For his part, DBM’s Toledo said the infrastructure development remains a top priority of the Duterte administration.

“The multiplier effects [of infrastructure programs] are expected to boost the economy. That’s why the BBB will be in a full swing in 2022,” he added.

“This is equivalent to 5.3 percent of GDP and shall be allocated for the major programs of the DPWH and DOTr, such as the Network Development Program (P128.1 billion), Flood Management Program (P113.5 billion), Rail Transport (P110.9 billion) and Land Public Transportation Program (P13.9 billion),” he said.

‘Growth-enabling budget’

For his part, House Committee on Appropriations Senior Vice Chairman Joey Sarte Salceda said the P1.8-trillion budget for the two main infrastructure agencies alone demonstrates the administration’s commitment to strong infrastructure spending under the BBB flagship program and the equally important countryside infrastructure programs.

“Once we get a better sense of the newly submitted NEP, we will see whether outright budget increases, or realignments, are the overriding need in our infrastructure budget. But, for now, my cursory observation is that this is a growth-enabling infrastructure budget,” he said.

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“We need growth-affirming projects that link centers of economic activity, open frontier areas to new development, enhance value chains in the countryside, and improve labor productivity through shorter commutes,” he added.

Also, he said the government should invest in human infrastructure —hospitals, schools, rural health centers, evacuation centers, and the like.

“These investments enhance the ability of our people to contribute to the economy in more productive and healthier ways,” he added.

He said the country should also invest in agricultural infrastructure, especially in value-creating and value-enhancing infrastructure.

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Article and Photo originally posted by Business Mirror last August 26, 2021 and written by Jovee Marie De La Cruz.

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