MANILA, Philippines – The Department of Finance stated that it is expected this year that the Duterte’s Administration’s massive infrastructure program is to take effect following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
“I am sure the projects that have been planned for the DPWH (Department of Public Works and Highways) are going to go into high gear now that we have basically our capital already, our own funding for our portion of these projects,” Dominguez said. The recently imposed TRAIN law would allow the government to generate revenue which will be used to fund the first set of high-cost infrastructure projects under the Build Build Build Program, according to Carlos Domingues, Finance Secretary.
According to the data from the DOF, as of early this year, a total cost of about P1 trillion for a total of 44 public infrastructures are under construction. Thus, 15 other projects are also in the pre-construction stage which worth P1.04 trillion.
Dominguez noted that the Philippine National Railways (PNR) North 2 project, is one of the big-ticket projects that would start this year. The PNR would connect from Metro Manila to Clark International Airport.
The Mega-Manila Subway Project, worth P355.6 billion; the PNR South Commuter Line, P134 billion; the Malolos-Clark Railway, P211.46 billion, and the Metro Manila Flood Control project, that’s worth P25.5 billion, are among those other projects that are currently in the pre-construction phase.
Aside from the funds that the government would generate through the TRAIN law, Dominguez added that financing aids from the country’s development partners would supplement the revenue for the administration’s infrastructure projects. From the P8.4 trillion capital needed for Build Build Build program, about a fourth of it would come from TRAIN revenue, and the remaining would be funded by official development assistance (ODA).
To ensure the country’s fiscal stability and to continue declining debt-to-gross domestic product ratio, despite the high expenses for the infrastructure, the finance chief guaranteed the government would carefully manage its liabilities.
Gil Beltran, Finance Undersecretary, stated in his latest economic bulletin that the share of the national government’s debt to GDP remained at 42.1 percent from the end-2016 level.
Beltran said, “In the short-term, the government’s Build Build Build program may exert upward pressure on the debt stock. In the medium to long-term, however, a sustainable high economic growth rate will outrun the growth of debt.” He expects the government’s debt-to-GDP ratio to maintain its downward momentum as economic growth is seen to expand in debt despite the expenses for the Build Build Build program.