Economists and economic managers are confident that with the spike in infrastructure spending, the economy will maintain its position as one of the fastest-growing economies in Asia with a sustained growth path over the next few years.
Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) Director-General Ernesto Pernia said last year’s economic growth was “very good, spectacular” considering it is post-election year.
“If you look at post-election years in 2015 and then 2011, the growth rates were really low. In that context, it (this year’s growth) is a very good performance. We expect it to be sustainable,” he said.
“The infrastructure spending is quite crucial in the faster growth this year,” University of Asia and the Pacific (UA&P) economist Dr. Victor Abola.
Abola said the government’s “Build, Build, Build” program is “credible”, as spending on infrastructure surged more than three times from P175.4 billion in 2011 to P847.2 billion in 2017.
“That should more than double by 2022. The big jump really occurs in 2018 where we expected (the infrastructure spending) to be 6.1 percent of gross domestic product (GDP). That’s the government side,” he said.
The Duterte administration plans to spend P1.898 trillion for infrastructure by 2022, bringing the infrastructure spending as a percentage of GDP ratio to 7.4 percent.
First Metro Investment Corp. (FMIC) president Rabboni Francis Arjonillo noted that with the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) law, the “Build, Build, Build” infrastructure program is expected to be full steam ahead, which “will surely drive economic expansion further.”
“All engines of growth are up and running at a faster pace. The country’s economy will remain as the best performing in ASEAN, we are experiencing a demographic sweet spot that will continue to push consumption expenditure, there’s a revival in manufacturing, and the country’s external position is strong,” he said.
The Department of Budget and Management (DBM), meanwhile, said November infrastructure spending went up by 44.8 percent while disbursements grew by 10.4 percent.
“The statistics on government disbursements only bolster our thrust for efficient and effective public service delivery,” Budget Secretary Benjamin Diokno said.
He added the rise in infrastructure spending can be attributed to the Duterte administration’s ambitious Build Build Build program, which will usher in the Golden Age of Infrastructure in the Philippines.
The report on the National Government Disbursement Performance as of November 2017 indicated a sharp uptrend in infrastructure and capital spending as infrastructure disbursements reached P43.8 billion during the month, registering a 44.8 percent year-on-year increase.
The higher infrastructure spending also lifted disbursements in November 2017, as it reached P252.1 billion, or a 10.4 percent increase.
National government disbursements from January to November 2017 totaled P2.494 trillion, up by 10.1 percent from a year ago.
For November, personnel services (PS) and infrastructure and other capital outlays served as the main growth drivers of disbursements.
PS reached P97.6 billion, P14.3 billion or 17.1 percent higher than the level in the previous year on account of the release of the year-end bonus and cash gift of government employees; the release of 2016 Performance-Based Bonus of some agencies; as well as the requirements for the creation/filling of pension (DepEd, SUCs, and PNP); and retirement gratuity benefits of retirees in various agencies (DILG and DND).
Meanwhile, Infrastructure disbursements reached P43.8 billion, or a year-on-year increase of P13.6 billion or 44.8 percent.