MANILA – Infrastructure spending is expected to exceed the government’s target this year, driven by the government’s “Build, Better, More” development program.
Infrastructure spending would likely expand by 10 to 20 percent this year, according to Rizal Commercial Banking Corporation chief economist Michael Ricafort.
“Infrastructure spending has been growing by at least +20% year-on-year in recent months, thereby could signal meeting or even exceeding the target for 2023 and could bode well in terms of greater contribution to both economic growth and development as these infrastructure projects also create new frontier areas in terms of more residential, commercial, industrial, tourism, and township areas along the path of or near these major infrastructure areas especially in the countryside,” Ricafort said in a statement.
The government earlier committed to sustain the annual infrastructure spending at 5 to 6 percent of gross domestic product (GDP).
For this year, the administration has allocated PHP1.3 trillion in the 2023 national budget to sustain the momentum of public infrastructure.
According to the Department of Budget and Management, this includes PHP478.7 billion for roads, PHP283.2 billion for flood control infrastructure, PHP164.1 billion for local infrastructure development, PHP48.1 billion for buildings, and PHP40.1 billion for railways. Ricafort said the government’s infrastructure program would help the economy to grow faster.
“The government’s infrastructure spending has been at least 5 percent to 6 percent of GDP in recent years, much higher vs. below 2 percent around 10-20 years ago and moving closer to other ASEAN countries, as the administration committed to continue the infrastructure projects from the previous administration and even add more infrastructure projects, which have been a major catalyst for the Philippine economy in recent years,” he said.
Ricafort added that better infrastructure facilities would help attract more foreign investments in the country, help increase the flow of exports and imports, increase the flow of domestic trade transactions, allow the better movement of workers that increase their productivity, support the arrival and movement of both foreign and domestic tourists around the country and will allow the Philippines to better catch up with much higher tourism numbers on other Asian countries. (PNA)