It is usually not the norm to have a country’s economic team regarded as “rock stars”, but as I listened to the Dutertenomics symposium I was gripped by excitement. (I have a Finance and Eco background, so indulge me).
The massive infrastructure spending program of this administration is going to be the largest ever in the country’s history, amounting to over 1.1 trillion pesos spent in the first year alone and ramping up every year, to the tune of around 5.3% of GDP, on roads, rail, bridges, airports, etc.
Best of all, one gets the impression that finally (!) the Philippine government understands what needs to be done AND has the political will to do it. Probably the best soundbite of the afternoon came from Transport Secretary Art Tugade who said that in the past it was always “talk, talk, talk”. Now it’s going to be “build,build, build”.
Budget secretary Diokno tickled all the Keynesians in the room, confirming that it’s going to be deficit spending for the next few years, pegged at 3%.
NEDA chief Pernia estimates the creation of 1.7 million new jobs until 2022 as a result of the infrastructure spending.
DPWH Secretary Villar gave a sneak peak at the upcoming projects, which include a high-speed spine highway network connecting much of Luzon, enabling transport from Bicol to La Union in 12hrs, for example. A harbor link will be built – from Manila’s ports to points north – eventually to be used by the 40,000 logistics vehicles that now jam edsa and c5.
There were many more sexy projects mentioned such as the buildup of Clark as a commercial airport and the development of a new modern city there to decongest Manila. There is apparently a plan for a subway that will run from Quezon City to Taguig. The Mindanao Rail and Panguil Bay Bridge.
Finance Secretary Dominguez summed it all up emphatically. The plan is to move to an inclusive, investment-led growth fueled by government spending on infrastructure–a rapid catch up on what our neighbor’s have been doing for the past decade. We cannot rely on low interest rates and cheap oil any longer. DOF’s kicker is tax reform to rationalize income and corporate taxes and make us more competitive with our neighboring Asian countries.
Viewed from the perspective of historical austerity measures and underspending of previous administrations, the plan is indeed crazy wild. In Dominguez’s words, it is “audacious”.
Quite fitting for this audacious president, the likes of which we have not seen before.
Charles Englund April 19 2016