Laborers work on an expressway in Manila in this March 8, 2017, photo. The government’s ambitious ‘Build, Build, Build’ program will allow the country to ramp up infrastructure spending and meet the World Bank’s recommended level in the medium term, London-based economic research firm Capital Economics said. AFP
The government’s ambitious “Build, Build, Build” program will allow the country to ramp up infrastructure spending and meet the World Bank’s recommended level in the medium term, London-based economic research firm Capital Economics said.
Separately, Capital Economics echoed the Bangko Sentral ng Pilipinas’ recent statements that fears of an overheating economy were “overdone.”
In a Dec. 8 report, Capital Economics noted that “poor quality infrastructure acts as a major drag on growth across large parts of South and Southeast Asia,” citing that in the Philippines and Indonesia, “gridlocked roads and inadequate port facilities make transporting goods both slow and expensive, hindering the development of the manufacturing sector.”
“The World Bank has estimated that developing economies need to spend the equivalent of 5.5 percent of their GDP [gross domestic product] a year to ensure that inadequate infrastructure doesn’t become a major drag on growth,” Capital Economics said, but pointed out that across the region, only China, India and Vietnam have already met such infrastructure spending-to-GDP ratio.
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“There is only one other country that is likely to meet the World Bank’s 5.5 percent-of-GDP target over the coming years. This country is the Philippines, where the latest budget projects that government spending on infrastructure investment will rise to 6 percent of GDP by 2020, from 4 percent in 2016,” according to Capital Economics.
Under “Build, Build, Build,” the government would rollout 75 flagship, “game-changing” infrastructure projects, with about half targeted to be finished within President Duterte’s term, alongside plans to spend a total of up to P9 trillion on hard and modern infrastructure until 2022.
