‘Infrastructure buildup to be pursued at all cost’

By Luis Leoncio

The government’s economic man­agers last week said the planned infrastructure buildup of the Duterte administration would be pursued, even at the risk of increased public borrowings.

The massive infrastructure buildup is estimated to cost P5.4 trillion during President Duterte’s six-year term—which is P900 billion a year, or the equivalent of 5.4 percent of the country’s gross domestic product (GDP) annually until 2022. (This rectifies an earlier figure that placed the to­tal cost of the infrastructure buildup under the Duterte administration to only P900 billion.)

Previous administrations allocated only 2.6 percent of GDP for infrastructure in the past 50 years.

Budget Secretary Benjamin Dio­kno said the massive infra buildup would be pursued relentlessly even if Congress misses the enactment of pro­posed tax-reform measures that are ex­pected to raise government revenues.

On the sidelines of the Philip­pine Development Forum at the SMX Convention Center in Davao, Diokno said that delaying the implementation of the infrastructure program would cause more problems, considering the already huge infrastructure gap in the country.

“We will continue to invest in in­frastructure and human-capital de­velopment because you create more problems if you delay,” he said.

Diokno said that if the proposed tax measures do not come in time, the government will turn to borrowings — 80 percent from domestic and 20 per­cent from foreign sources — to finance government projects, considering the current lower interest rates offered by financial institutions.

He expressed hopes, however, that Congress would pass the proposed tax-reform bill on time.

Finance Secretary Carlos Domin­guez III said it is high time to invest heavily on infrastructure projects, as the country is at its “Goldilocks mo­ment in our economic history.”

The current favorable situation, he said, includes “low interest rates, low inflation, and a lot of liquidity domes­tically.”

He added: “If we do not use this moment and take advantage of it to close our infrastructure gap now, when will we do it? When you look at the tax-reform program, there are items there that are not exactly popu­lar. However, if we don’t pass this leg­islation, how will we pay for our future infrastructure projects?

“We need to seize the moment and make the hard decision. If we do not do it, we will miss the boat,” he said.

Dominguez said tax reforms were proposed early in the Duterte admin­istration to allow for “political adjust­ments.”

He said the administration is aware that they cannot make unpop­ular proposals like tax reforms to Con­gress right before elections as these would damage the political chances of legislators. He said this was why they were making the tax-reform proposals early to that legislators who plan to run in the next election would have time to “repair their political situation.”

He added that the tax-reform measures are a must because they are vital to the country’s economy.

“This is the time to do it. People are saying that it will be inflation­ary, yes, but the inflations are low,” Dominguez said. “We are using this to increase expenditure on education, health, public infrastructure. It will be better for the Filipino people and make us a better nation. You raise the taxes, but you raise the benefits provided,” he said.

In his speech at the forum, So­cioeconomic Planning Secretary Er­nesto Pernia also cited peace and or­der as a key component in achieving the 10-point socioeconomic agenda and the 25-year long-term vision for the Philippines called “Ambisyon Natin 2040.”

Peace and order is the “cross-cut­ting theme” for the economic agenda of the administration of President Duterte, Pernia said. “Everything starts with peace and order.”

The forum, which gathered 400 business leaders, local and inter­national non-governmental orga­nizations, government leaders and financial institutions, served as a brainstorming session among stake­holders in the business sector to flesh out the President’s 10-point socio­economic agenda.

Presidential Peace Adviser Jesus Dureza pointed out the importance of peace in bringing investors in ar­eas affected by conflict. If there is peace, there is development, he said. Both must be addressed simultane­ously, he said.

He cited as an example, Maguin­danao province, which experienced violent fighting in the past but which is now reaping the benefits of peace after an investor poured in capital for banana plantations.

Dureza underscored the right to self-determination in addressing is­sues or adopt solutions that are lo­cally accepted to achieve a just and lasting peace.