Massive infra projects start rolling this year – DOF

MANILA, Philippines — The Duterte administration’s massive infrastructure program is expected to be in full swing this year following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, according to the Department of Finance (DOF).

In a statement yesterday, Finance Secretary Carlos Dominguez said the recently enacted TRAIN law would enable the government to generate revenue required to bankroll the first set of big-ticket infrastructure projects under the Build Build Build program.

“I am sure the projects that have been planned for the DPWH (Department of Public Works and Highways) are going to go into high gear now that we have basically our capital already, our own funding for our portion of these projects,” Dominguez said, referring to the recent implementation of the TRAIN.

Dominguez said among the big-ticket projects that would commence this year is the Philippine National Railways (PNR) North 2 project, which would connect Metro Manila to Clark International Airport.

According to data from the DOF, a total of 44 public infrastructure projects with a total cost of about P1 trillion are under construction as of early-2018.

About 15 others, worth P1.04 trillion, are also in the pre-construction stage.  The DOF said most of these projects would most likely start their implementation this year.

Projects currently in the pre-construction phase include the P355.6 billion Mega-Manila Subway Project and the P134 billion PNR South Commuter Line, the P211.46 billion Malolos-Clark Railway, and the P25.5 billion Metro Manila Flood Control project, among others.

Meanwhile, Dominguez said financing aids from the country’s development partners would supplement the incremental revenue from the tax reform law in funding the administration’s infrastructure projects.

He said about a fourth of the capital needed for the government’s P8.4 trillion Build Build Build program would come from TRAIN revenue, while the rest would be funded by official development assistance (ODA).

However, the finance chief assured the government would be prudent in managing its liabilities to ensure the country’s fiscal stability and to maintain its declining debt-to-gross domestic product (GDP) ratio.

Finance Undersecretary Gil Beltran, in his latest economic bulletin, said the share of the national government’s debt to GDP in 2017 has been maintained at 42.1 percent from the end-2016 level.

Beltran expects the government’s debt-to-GDP ratio to sustain its downward momentum despite the rollout out of the Build Build Build program as economic growth is seen to outpace increase in debt.

“In the short-term, the government’s Build Build Build program may exert upward pressure on the debt stock. In the medium to long term, however, a sustainable high economic growth rate (brought about by better infrastructure) will outrun the growth of debt,” Beltran said.