Infrastructure spending of over a half-trillion pesos in the first nine months of 2018 demonstrates the “fast and sure” mantra in the implementation of projects and shows the vastly improved absorptive capacity of government agencies on the Duterte watch, Finance Secretary Carlos Dominguez III said here Wednesday (Nov. 28).
These increased infrastructure investments of P571 billion over the January-September 2018 period are matched by improved revenue collections, with the total take of the Bureaus of Customs (BOC) and of Internal Revenue (BIR) in the first 10 months of the year amounting to P2.099 trillion, up 16 percent from collections in the same period last year, Dominguez said.
He said the P571 billion in Department of Transportation (DOTr), the two lead agencies in the ‘Build, Build, Build’ program are moving faster than expected. The old problem of absorptive capacity has been solved. The mantra of fast and sure is being observed,” said Dominguez at the opening of the Sulong Pilipinas-Philippine Development Forum at the SMX Convention Center in the Lanang district here.
Dominguez said he was “very happy to note that the Congress is going to call a hearing on what is perceived as underspending because we would like to inform the Congress and the public that “the bad old days of underspending, which critics faulted the government for moving too slowly in getting the projects done, is now over.”
“Now that we are moving ahead of our spending schedule, we are now being faulted for enlarging the budget deficit, when in fact, we said that our budget deficit is going to be 3 percent of GDP. And we have hit it on target this year, the first time ever in recent history,” the Finance chief said.
He said the P571 billion for infrastructure in the first nine months is significantly higher by P225.5 billion or 65.3 percent compared to the amount spent in 2015, which was the last full year of the Aquino administration.
The sum of P345.3 billion spent by the Aquino government in 2015 is even 20 percent below target, said Dominguez, who likewise noted that “set against the infrastructure investments we are seeing now, the previous administration delivered an anemic performance.”
On revenue performance, Dominguez said the tax collections in the first 10 months of 2018, which is just slightly 3 percent short of target, was significantly better by P298.66 billion or 16.58 percent compared to the P1.8 trillion collected during the last full year of the Aquino administration in 2015, which was even 15 percent below target.
Dominguez said that Mindanao is at the front and center of “Build, Build, Build,” made possible by the improved revenue collections as a result of the implementation of the first package of the comprehensive tax reform program (CTRP).
“The package of infrastructure projects in this area includes irrigation systems, extensive road networks, construction and rehabilitation of key regional airports, long-span bridges and the Mindanao Railway project that will help dramatically enhance regional connectivity, reduce the cost of moving goods and people across long distances and spur economic activity for this part of the country,” Dominguez said.
Aside from tax reform, the infrastructure program is also benefitting from the generous funding support from Japan and China, two of the Philippines’ closest development partners in the region, he said.
Dominguez, however, noted that some uninformed critics have made unfounded claims about the country falling into a debt trap as a result of the financing extended by China and Japan even though the government had secured these at the lowest interest rates and longest term arrangements possible.
“Let me reiterate, in the face of uninformed criticism, this administration is not about to allow the country to be drowned in debts to China. In all the financing agreements, we have made sure that the country got the best deals possible and that the cardinal tenets of fiscal discipline are carefully observed,” Dominguez said.
He said that if project financing coming this year is included, the estimated project debt to China will constitute only 0.65 percent of the country’s total debt from the current 0.11 percent. Meanwhile, the project debt to Japan will increase from the current 3.17 percent to 8.90 percent of the total debt at the end of this year.
By 2022, when most of the financing for ‘Build, Build, Build’ should have been accessed,