Increased investment on infrastructure is one of the key elements in sustaining Philippine economic growth. It is the catalyst that will expand the economy to greater heights and put the Philippines at least at par with its neighboring countries in Southeast Asia like Malaysia and Thailand.
The Philippines’ ambitious P8.44-trillion “Build, Build, Build” program is a shot at expanding the economy and making growth inclusive to the benefit of the greater population. But slow government spending and delays in the construction of big-ticket infrastructure projects will defeat the objective of the state.
The World Bank this early noted the sluggish pace of the government’s infrastructure program, prompting the multilateral institution to slightly downgrade the 2017 growth forecast for the Philippines to 6.6 percent from the previous estimate of 6.8 percent.
Says the World Bank: “The delay in the anticipated push of the planned government infrastructure program has been contributing to the moderation of fixed capital formation growth, softening the growth prospect for the year.”
“The pace of economic growth could be slower if the government is unable to timely deliver on its planned infrastructure program. Complementary reforms to address budget execution and implementation bottlenecks and to ensure high quality of spending are needed,” it added.
Infrastructure projects like toll roads, bridges, airports and seaports, post-harvest facilities and rail networks increase the flow of goods and services. They give the countryside access to the the market that is usually found in urban centers. They serve as an incentive to produce more and create a multiplier effect that translate into increased employment. With more jobs created, the Philippines is effectively reducing poverty incidence.
Authorities and policymakers, thus, must see to it that the spending program on infrastructure is on track to achieve the economic growth target. Sluggish spending and delays in the execution of projects should be the exception rather than the rule.