BBB progressing despite economic challenge
The Philippine government is progressing well with its massive infrastructure program despite global headwinds that are affecting the Philippine economy, according to Finance Secretary Carlos Dominguez.
In a meeting with officials from Standard Chartered Bank last week, Dominguez said the administration’s Build Build Build program is “doing very well” even with the uncertainties and challenges plaguing the international and domestic landscape.
He cited the New Bohol International Airport in Panglao as an example. The airport is slated to be operational by yearend.
Dominguez said the Philippines is also feeling the impact of various global headwinds, including the increasing prices of oil in the world market.
Dominguez also cited the escalating trade dispute between the US and China, as well as the US Federal Reserve’s aggressive stance on monetary policy normalization through interest rate increases.
The finance chief had expressed concern that these developments could impede the growth of emerging economies, such as the Philippines, and lead the way to a global recession.
Economic managers also cited these factors as the reason for the revision of the government’s economic growth target to a range of 6.5 to 6.9 percent, from the previous range of seven to eight percent for 2018.
To further strengthen the Philippine economy’s resilience against these headwinds, Dominguez said the government is implementing its ambitious infrastructure program to sharpen the country’s competitiveness in the medium term and promote inclusive growth over the long-term.
Dominguez said the Build Build Build program would enable the government to expand its inventory of assets, which future administrations could opt to privatize should they need to raise funds.
Karby Leggett, Standard Chartered’s managing director for Asia and head for public sector, also noted the strengths of the Philippine economy, such as its robust foreign exchange reserves and fast economic growth.
He said the country’s widening current account deficit was also “understandable” considering the massive importation of capital goods needed to implement the government’s infrastructure program.
Leggett said the long-term outlook for the Philippine economy is “extremely positive.”
The Duterte administration’s Build Build Build program is expected to address the country’s infrastructure gap and usher in the golden age of infrastructure in the Philippines.
The program will require P8-to P9-trillion in investments over the medium term. As a share of gross domestic product, infrastructure spending is seen to rise to 7.3 percent of GDP in 2022 from the current 5.4 percent.
According to economic managers, the program is seen to help the government sustain the country’s economic growth, encourage investments, generate jobs and ultimately, reduce poverty in the Philippines.