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Infrastructure buildup cut in half sans TRAIN

Less than half of the massive public infrastructures buildup program costing hundreds of trillions of pesos will be funded unless the Tax Reform Acceleration and Inclusion (TRAIN) program, endorsed by the Department of Finance (DOF), is passed.

At the Development Budget Coordination Council (DBCC) budget hearing and presentation before the Senate Committee on Finance on Wednesday, Finance Secretary Carlos G. Dominguez III reiterated that without the TRAIN to support the program, the massive buildup program will fail.

“It’s very important [that] without the TRAIN we will probably not be able to fund half, maybe not even half,” Dominguez told the senators.

Under the program, some P1.097 trillion, or 6.3 percent of the country’s GDP, is needed in 2018 alone. This comprises a third of the budget proposed by President Duterte for 2018 amounting to P3.77 trillion.

Dominguez also said the continued expansion of the local economy would be stymied without the tax and policy reforms embodied in the TRAIN proposal.

“Of course not. It will not continue [expanding] as projected. [Growth may even be reduced to] less than half,” he said.

Dominguez added funding the infrastructure projects under the “Build, Build, Build” program will be from a mix of revenues from the TRAIN, from the budget, from official development assistance (ODA) loans, and from hybrid financing.

“The balance will come from loans from multilateral agencies. The Chinese financing will be paired with the Asian Infrastructure Investment Bank (AIIB) and Japanese financing will be paired with the Development Bank of the Philippines,” he said.

Budget Secretary Benjamin E. Diokno said an estimated P1 trillion is needed by 2018 to fund the rolling infrastructure projects of the government.

He said some P1 trillion is needed in 2018 alone to fund the very ambitious Build, Build, Build program under Duterte and some P8 trillion to P9 trillion over the next five years would be needed, according to Diokno.

The projects under the Build, Build, Build program include the Metro Manila subway; the Mindanao’s mass transit railway; the commuter railway linking Tutuban in Manila to Clark, Pampanga; the Bonifacio Global City to Ortigas Road Link Project; and the Cebu Bus Rapid Transit, among others.

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