Infrastructure Projects Of Duterte Admin To Improve PH Connectivity, Emergency Response System
The Duterte administration’s ambitious program to ramp up
investments in infrastructure is meant not only to improve connectivity and
boost economic productivity in the countryside, but also to develop the
country’s emergency response system and better protect its communities most
vulnerable to natural disasters.
Department of Public Works and Highways (DPWH) Secretary
Mark Villar said infrastructure plays a key role in mitigating the effects of
natural disasters and man-made conflicts as shown by the lessons learned during
the onslaught of super typhoon Yolanda and the Zamboanga City siege in 2013.
“In these separate cases, the presence of alternative
gateways to city centers, which require intermodal transport systems could have
saved more lives and mitigated the effects of these crises on the affected
communities,” Villar said.
Infrastructure is also indispensable to a robust economy in
the regions, especially those farthest from Metro Manila. Villar pointed out,
for instance, the need to build a direct road link between the Caraga region
and Bukidnon to enhance trade in Mindanao.
“Improving connectivity in the regions through physical
infrastructure is necessary not only to realize the government’s goal of
inclusive growth, but also to boost our emergency response systems and reduce
our vulnerability to disasters, whether natural or man-made,” Villar said.
“Moreover, gaps in infrastructure that deliver basic
services exist and need to be funded. For instance, in the area of solid waste
management, only 30 percent of the 42,028 barangays nationwide have materials
recovery facilities,” Villar noted.
The Development Budget Coordination Committee (DBCC) has
also stressed the need to improve the country’s disaster preparedness to avoid
“hindrances” to the economy’s continuous high growth rate.
According to a statement released by the DBCC following its
yearend meeting last December, “government revenues are expected to reach
P2.913 trillion in 2018 once the tax reform package (submitted by the
Department of Finance to the Congress) is passed.”
“The projected proceeds of the tax reform package – around
P206.8 billion under Package 1 – will fund the government’s big-ticket
development projects, particularly the infrastructure program,” read the DBCC
statement.
The DBCC statement also said that to sustain high growth, National
Economic and Development Authority (NEDA) Secretary Ernesto Pernia advised that
the government remain vigilant of external risks such as Japan’s fragile
expansion, the slowdown of China’s economy, and a possible revival of
protectionist policies in the United States and Europe.
On the domestic front, “the country must intensify its
disaster preparedness measures as well as the logistics and infrastructure
project coordination to avoid hindrances,” Pernia said.
According to Budget and Management Secretary Benjamin
Diokno, projects that, the total infrastructure budget – both national and
local — will grow from P861 billion in 2017 to P1.898 trillion by 2022, or from
5.4 to around 7.0 percent of GDP.
“These record levels of spending will align our country with
its more vibrant neighbors and put us on track to achieve our vision of
eradicating extreme poverty and transforming our economy into a high-income one
by 2040,” Diokno said.
Diokno said, though, that this unprecedented infrastructure
spending can happen only if the government were to raise a lot more revenues to
ensure the financial viability of such an ambitious program.
“This can only be done by implementing broad and deep
reforms in tax policy and administration through the enactment of the Department
of Finance (DOF) – proposed Comprehensive Tax Reform Program (CTRP) now pending
in the Congress,” Diokno noted.
The first package of the CTRP was submitted by the DOF to
the Congress last September 26.
Finance Secretary Carlos Dominguez III said the DOF welcomes
the recent statement of Rep. Dakila Carlo Cua, who chairs the House ways and
means committee tackling tax reform, that the first package would be approved
by his panel in January this year.
In the medium-term, Dominguez said tax reform is expected to
help reduce the poverty rate from 21.6 percent in 2015 to 14 percent in 2022,
lifting some six million Filipinos out of poverty, and helping the country
achieve upper middle income country status where per capita gross national
income increases from $3,550 in 2015 to at least $4,100 by 2022, which is where
China and Thailand are today.
If this momentum is sustained, the country would be well on
its way to becoming a high-income economy by 2040 with a per capita gross
national income of at least $12,000, or where Malaysia and Korea are right now,
he added.
Package One of the CTRP proposes to lower personal income
tax rates, broaden the Value Added Tax (VAT) base, and increase the excise
taxes on oil products and automobiles.
The lowering of personal income tax rates, a promise that
President Rodrigo Duterte made during the 2016 poll campaign, will increase the
take-home pay of workers and make our tax rates more competitive, Dominguez
said.
A broader VAT base will level the playing field and reduce
massive leakages, while higher excise taxes on oil products and automobiles
will improve the progressivity of the tax system as richer households consume
far more of these products, he said.
“For instance, the top 10 percent of households consume
around 50 percent of oil products (per 2015 FIES). Higher excise taxes can also
help address traffic congestion and pollution,” Dominguez noted.
“Meanwhile, to protect the poor and vulnerable sectors,
highly targeted transfers and subsidies will be provided as part of the ramp up
of social spending from 37.3 percent of the 2016 budget to 40.1 percent of the
2017 budget,” he said.
According to a report quoting BMI Research, sustaining the
country’s high growth path is dependent on the Duterte administration’s ability
to roll out big-ticket infrastructure projects.
“Economic growth performance will largely depend on the
Duterte administration’s ability to cut through red tape and get infrastructure
and investment projects going, as well as to reassure investors of the
government’s commitment to maintain and improve the public-private partnership
program,” read the report of BMI Research published in the January edition of
its Asia Monitor.
Also, the Oxford Business Group has cited a November report
of ratings agency Standard & Poor’s that said the Philippines was a top
performer in Southeast Asia in 2016 partly because of an expansionary fiscal
policy that emphasizes public infrastructure.
Other institutions have also said the Philippines can
sustain its high growth of above 6 percent and its status as one of Asia’s
fastest growing economies, provided that the Duterte administration delivers on
its commitment to accelerate spending on infrastructure.
These private and multilateral institutions include the
International Monetary Fund, World Bank, Asian Development Bank, Fitch Ratings,
S&P Global Ratings, Nomura, First Metro Investment Corp. (FMIC), Colliers
International, Nordic Business Council of the Philippines (NBCP), Philippine
Chamber of Commerce and Industry (PCCI), Employers’ Confederation of the
Philippines (ECOP), Goldman Sachs, Bank of the Philippine Islands (BPI),
Standard Chartered Bank, Hong Kong and Shanghai Banking Corp. (HSBC), Sun Life
Asset Management Co., AB Capital Securities, Lamudi PHL and the Management
Association of the Philippines.
Source: DOF.Gov
Infrastructure Projects Of Duterte Admin To Improve PH Connectivity, Emergency Response System
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January 11, 2017
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