The government’s infrastructure spending as a percentage of gross domestic product (GDP) could significantly jump as early as next year should the proposed measure on the Maharlika Investment Fund (MIF) and the Public Private Partnership (PPP) Act be implemented as planned.
Finance Secretary Benjamin Diokno said on the sidelines of the Franchise Asia Philippines 2023 International Conference in Pasay City yesterday the government could double its infrastructure spending with the passage of these measures.
“The five to six percent (of GDP medium-term target) infrastructure spending, that’s just from the budget. If the PPP (Act) and the MIF pushes through, it could reach 10 to 12 percent per year,” Diokno said.
“Most of the priority projects are ready, (there are) feasibility studies, some are in the detailed engineering phase, it could be as early as next year,” he added.
According to the Development Budget Coordination Committee, the government has an infrastructure program of P1.29 trillion for this year, equivalent to 5.3 percent of GDP.
In 2022, actual infrastructure spending of the government totaled to P1.28 trillion or 5.8 percent of GDP.
“We need that (higher infrastructure spending). There are 7,200 islands that we have to interconnect,” he said.
Meanwhile, Diokno was asked to comment on the discussion paper published by the UP School of Economics titled “Maharlika Investment Fund: Still Beyond Repair” which finds that “the MIF violates fundamental principles of economics and finance and poses serious risks to the economy and the public sector — notwithstanding its proponents’ good intentions.”
“In view of the foregoing, we call upon President Marcos to seriously reconsider the final approval of the Maharlika Investment Fund bill, and present before the public a clear and solid rationale for setting it up in the first place,” the paper, written by 21 faculty members, said.
“We also call on our former and present colleagues who are now part of the Marcos economic team to reconsider their position on Maharlika and advise the President accordingly, in line with their best appreciation of their discipline and the reservations expressed by the rest of the economics profession of the country,” it added.
Diokno said the discussion paper written by his colleagues is quite late, as the measure has been approved by Congress and will soon be transmitted to the Office of the President.
“…they have to read first the Senate version. There are a lot of safeguards in place. This Maharlika Fund is really going to be very useful for us — another source of funding for our desire to boost infrastructure,” Diokno said.
“It (UPSE paper) is a good reading material. My colleagues at the UPSE should respect the NEDA (National Economic and Development Authority), most of them came from NEDA,” he added.
Diokno said the MIF is both developmental and commercial.
“We will not invest in projects that have no cash inflow. It has to have returns to make sure the funds will continue,” he said.
