DAVAO CITY—The incoming Duterte administration will increase annual infrastructure spending to P1 trillion beginning 2017 to spread development to other parts of the country.
Incoming budget secretary Benjamin Diokno said the plan was to raise infrastructure spending to as much as 6 percent of gross domestic product.
Diokno said that while agriculture would be the main priority in the 2017 budget proposal, infrastructure spending would account for the largest part at a range of P800 billion to P1 trillion.
“We will prioritize number one agriculture, number two, infrastructure. We are planning to spend as much as 5 percent to 6 percent [of GDP] for infrastructure. And we’re thinking about P800 billion to P1 trillion for infrastructure,” Diokno said at the sidelines of the Sulong Pilipinas business consultation forum at SMX Convention Center here.
Latest data from the Budget Department showed that as of the third quarter of 2015, the government spent only P243 billion in infrastructure or 2.55 percent of GDP, below the 2015 target of 4.47 percent of GDP. The Aquino administration set an infrastructure spending target of P595.7 billion in 2015.
Higher infrastructure spending is in line with the Duterte administration’s target to raise the budget deficit ceiling to 3 percent of GDP in 2017 from the current target of 2 percent.
Incoming Economic Planning secretary Ernesto Pernia cited the need to spread development outside Metro Manila. He said about two-thirds of GDP was currently concentrated in the National Capital Region.
“We need to rebalance the economy from NCR development to regional and rural development to achieve for poverty and inequality-reducing growth,” Pernia said.
Pernia said the Duterte administration was looking at a GDP growth of 6.5 percent for 2016, a more feasible target than the Aquino administration’s goal of 6.8 percent to 7.8 percent.
“I think 6.5 percent would be feasible and conservative enough for the whole of 2016,” Pernia said.
Pernia said GDP growth in the second quarter would likely hit 7 percent, boosted by election-related spending. “It could be a little bit higher [than 7 percent] or the same,” he said. Growth in the first quarter reached 6.9 percent, amid robust private consumption and election-related spending.
Incoming Finance secretary Carlos Dominguez said the next administration also aimed to reduce poverty incidence among Filipinos to 16 percent by 2022.
“In the last six years, the poverty rate in this country has not gone below 25 percent. It has been steady at around that. We will set for ourselves a target of reducing that by between 1.25 and 1.5 percent a year,” Dominguez said.
Latest data from PSA showed that poverty incidence in the Philippines fell to 26.3 percent of the population in the first half of 2016 from 27.9 percent three years ago.
“They want lower poverty rates. They want standard of living to go up. They do not care what the growth rate is. They want personal life to be much better. I think that’s what last election showed,” Dominguez said.