During The Manila Times 6th Business Forum at the Marriott Hotel in Pasay City on Friday, Diokno stressed the importance of fiscal spending on infrastructure, reporting that as of the first half of 2017, spending has nearly reached the top of programmed spending for the full year.
As early as 2011, the World Bank issued a red flag on the way the former administration was underspending its budget and cited the need to speed up spending. At that time, public construction had declined for the fourth consecutive quarter and by an alarming 51.2 percent in the second quarter year-on-year as the implementation of fiscal projects stalled.
This time around, learning from the mistakes of past administrations in budget management, Diokno told the business forum delegates that the current administration’s policy-thrust on public spending yielded a narrower deficit of P6 billion in the first half.
This may seem irrelevant—because P6 billion is still a lot of idle funds—but not so much when compared with the full-year underspending of P96.3 billion in 2016, P328 billion in 2015, and P302 billion in 2014. Such large amounts of budget excess over the last three years may sound like good news, a prudent way of managing the national budget, but the government is not a bank that needs to end each fiscal year in the black.
Unlike the bottom line of a business that must see as large as possible a net income at the end of each fiscal or calendar year, the government must spend happily the people’s money on infrastructure development, health care and education, without which the economy and its building blocks would end up with stunted growth.
To observations that there may not yet be enough flurry of infrastructure construction activities seen around Metro Manila, suggesting delays in the implementation of the projects, Diokno assured the public that the government is fully invested in the program, ready to invest up to P9 trillion in it over the medium term. For this year alone, he said P858 billion has been allocated to infrastructure development.
People should not be impatient, for this ambitious sort of program does not get implemented overnight, he said, but added that the rewards that await the generations to come will bring sustainable and inclusive growth for the nation.
One caveat, though. Diokno reiterated an oft-repeated warning: traffic congestion will be worse before it gets better. That will happen especially in Metro Manila, when construction starts and runs 24/7 in the next few years.
The Philippines is now one of the most dynamic economies in East Asia, with sound economic fundamentals and a globally recognized competitive workforce, the World Bank noted in an updated overview of the country.
World Bank Country Director for the Philippines Mara Warwick said in the same forum on Friday a renewed emphasis on infrastructure in the Philippines is an opportunity to support further growth while addressing the more complex issues of poverty and inclusion.
The road to our Golden Age of Infrastructure may be paved with thorny issues, but building each road, each bridge, each train line cannot be overstated because the yields that can be expected to accrue to the economy will certainly allow its building blocks to grow, grow, grow.