November 21, 2017, 4:58 am
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P500B fiscal space available for infra

Budget secretaryBenjamin Dioknodoes not expect any problems insofar as the budget for infrastructure is concerned, as the government is anticipating an additional fiscal space of P500 billion.

Diokno said the amount is a combination of the increase in the deficit-to-gross domestic product (GDP) cap, and the expected revenue gain from the proposed comprehensive tax reform program.

“As far as the infrastructure is concerned, there will be no problem with the budget. We are pursuing what we call an expansionary fiscal policy. We have increased the deficit to GDP ceiling from 2 to 3 percent,” Diokno said at the 43rd Philippine Business Conference &Expo yesterday.

“In addition, we expect at least P100 billion from the tax reform. And (it) will be increasing because there is still tax reform two to five, so we expect, on average, about P500 billion additional in fiscal space,” he added.

Diokno however assured that despite the expansion in fiscal strategy, the debt-to-GDP ratio will continue to shrink over the medium-term.

The Duterte administration is planning to spend between P8 trillion and P9 trillion on its “Build, Build, Build” program over the next five years.

Based on estimates of the National Economic and Development Authority, this infrastructure program is expected to generate 106,824 additional jobs this year; 823,696 jobs in 2018; 1,115,999 jobs in 2019; 1,228,963 jobs in 2020; 1,399,463 jobs in 2021; and 1,705,023 jobs in 2022. 

While the average rate for infrastructure spending in the past administrations was 2.6 percent of the GDP, the Duterte presidency plans to ramp it up to 5.32 percent of GDP for this year alone with an infrastructure budget of P847 billion. 

The Duterte administration plans to gradually increase the public infrastructure budget to P1.2 trillion in 2018, P1.4 trillion in 2019, P1.5 trillion in 2020, P1.7 trillion in 2021, and P1.9 trillion in 2022.
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