By Cai Ordinario, November 9 2018; Business Mirror
Image Credit to Business Mirror
THE national government remains firm in its resolve to carry out its infrastructure program even if it is contributing to the country’s widening trade deficit, according to the National Economic and Development Authority (Neda).
In a briefing on the third-quarter performance of the economy on Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia said the “Build, Build, Build” (BBB) is a priority of the Duterte administration and thus will not easily be sacrificed.
“We haven’t made that decision to slow down on the Build, Build, Build. Even with the suspension of the excise tax in 2019, we consider the BBB as a primary priority program,” Pernia said.
“As we said in our earlier press conference, after the DBCC [Development Budget Coordination Committee], we are going to follow this hierarchy of essentiality: the least essential will first be cut and the infrastructure BBB program will be among the high-priority programs,” he said.
Neda Policy and Planning Staff Director Reynaldo Cancio added that continuing the BBB is a step toward the right direction because it is the government’s way of investing in future economic growth.
Cancio said investing in infrastructure is needed to improve productivity in the economy and allow Filipinos access to economic opportunities they need to lead comfortable lives.
He said the BBB will also help make various economic goods—including food items—cheaper and more accessible, especially in far-flung areas nationwide.
“I think it’s even more important that we invest in infrastructure considering that inflation is really coming from the supply side. So the more we build infrastructure, we improve productivity, improve mobility in the regions,” Cancio said. “It will be better for our economy.”
On Wednesday data from the Philippine Statistics Authority (PSA) showed the country’s trade deficit increasing 124 percent to a $3.93-billion deficit in September 2018, from the $1.75-billion deficit in September 2017.
PSA data showed total imports rose to $9.75 billion in September 2018, from $7.77 billion in September 2017, or a growth rate of 26.1 percent.
A third or 30.2 percent of the country’s imports was accounted for by capital goods. The value of $2.95 billion accounted for 30.2 percent in September 2018. It went up by 25.4 percent, from the September 2017 import value of $2.35 billion.
Pernia said the growth in imports was largely due to the BBB program, since the country needed to import construction materials for the Duterte administration’s ambitious infrastructure initiative.
The Neda disclosed earlier that the government will be spending P7.74 trillion for infrastructure, projects in the medium term.
Of this amount, around 64 percent or P4.97 trillion will be allocated for transportation projects. A far second is social infrastructure which will receive P1.01 trillion in the medium term.
This includes 75 flagship projects worth P1.881 trillion. Around 32 projects are going to be completed within the term of the administration.
Around 43 projects will commence under the Duterte administration but will be completed after the President’s term. Pernia said that, currently, 24 projects are undergoing pre-investment studies, 44 are already under implementation and seven are being review.