The United Nations Economic and Social Commission for Asia and the Pacific (Unescap) has found the Philippines most ready among its peers in the region to carry out an ambitious infrastructure-buildup program.
According to Finance Undersecretary Gil S. Beltran, the Philippines owns a number of positive influences, including substantial financing opportunities from the country’s development partners, the tax-reform program and rising revenue collection and the declining debt service ratio, that all contribute to an adequate fiscal space allowing the $305-billion economy to pursue an expansionary policy.
Beltran said apart from ample fiscal space, the Unescap also noted the country’s strong financial system, its ready liquidity supported by a good supervision and its buoyant saving rate.
“The workshop found the Philippines to be among the most ready in Asean in boosting infrastructure development,” added Beltran, who is also the DOF’s chief economist.
The government’s strong project evaluation and prioritization system based on economic viability in undertaking infrastructure projects, and a right-of-way law under Republic Act 10752 encourages the government and landowners to agree promptly on land transactions.
This adds to the ease by which the various infrastructure projects are pursued and recognized as a positive influence by the Unescap, Beltran said.
At a recent economic briefing in Singapore, Finance Secretary Carlos G. Dominguez III said that from 2010 to 2016, national government debt as a percentage of gross domestic product fell from 52.4 percent to 42.2 percent, or lower than the Asean average of 46 percent and the emerging market’s average of 47 percent.
This means the Philippines can deploy far more resources than its peers for the construction of public infrastructure that redound to greater and more inclusive growth down the line, he said.
“The Philippines currently holds investment-grade rating, with a credit default swap spread below the Asean average,” Dominguez added.
He Dominguez said the government has set aside more than $170 billion for infrastructure in the remaining five and a half years under President Duterte.
Some $23 billion will fund various infrastructure programs next year alone.
The Unescap, the largest UN body serving the Asia Pacific, recently convened in Manila its Workshop on Infrastructure Financing Strategies to discuss the Philippines’s infrastructure needs and the different financing modes and sources available to the country.