Fitch Ratings’ investment grade stamp for the Philippines will help push infrastructure spending higher, as the Administration creates greater room for expenditures for the country’s social and economic sectors, according to the Department of Budget and Management.
“With the country now at investment grade, we’re determined to strengthen our economic position further and expand our fiscal space for key socio-economic services. At the same time, we expect to attract more investments into the country’s infrastructure development program and, eventually, bring infrastructure spending to five percent of GDP,” Budget Secretary Florencio Abad said in a statement Sunday.
He confirmed that at the moment, public spending for infrastructure is at 2.8 percent of GDP. The Aquino administration has earlier committed to bring expenditures for infrastructure to 5 percent of GDP by 2016.
Abad added that more infrastructure investments will help support the growth of key industries, including the country’s agriculture, tourism and Business Process Outsourcing (BPO) sectors.
These include rehabilitating and developing arterial farm-to-market roads—especially in rice-and-corn, coconut, and high-value crop areas—and improving road access to tourism zones, and upgrading key airports and seaport hubs in tourist destinations.
Also in the works are the upgrading and expansion of rail and metro-rail transport systems and bus stations in urban centers.
Abad emphasized that infrastructure spending will also buoy the Administration’s social services programs, such as social housing for informal settlers, rural electrification in remote sitios and barangays, the development of post-harvest facilities, and the rehabilitation and upgrading of Regional Health Units, as well as district, provincial, and regional hospitals.
He recently expressed optimism on the country’s growth prospects, in the wake of Fitch’s rating upgrade for the Philippines.
“As we strengthen our bid for rapid, inclusive, and long-term economic growth, we look forward to inviting greater confidence from the global market, especially as we pursue our good governance agenda and work toward establishing real transparency, accountability, and openness in the Philippine bureaucracy. Ultimately, we intend to facilitate socio-economic growth that is truly inclusive, where jobs are successfully created and the dividends of improved governance are cascaded to all Filipinos,” he said. (DBM)