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PH increasing infrastructure budget to P400b in 2014

By Jennifer Ambanta | Posted on Jul. 18, 2013 at 12:02am | manilastandardtoday.com
The government will increase its infrastructure spending to P400 billion, representing 3 percent of gross domestic product next year, Budget Secretary Florencio Abad said Wednesday.
Abad said the government would boost infrastructure spending further to 5 percent of GDP by the end of the Aquino administration in 2016.
“Twenty-six percent of the budget focused on infrastructure.  [We would be] ramping up spending to 3 percent next year and further scale it up to 4.21 percent [in 2015) and eventually to 5 percent,” Abad said.
The government allotted P400 billion for infrastructure spending in 2014, P587 billion in 2015 and P800 billion in 2016.
Abad said the budget would be allocated mostly to horizontal developments such as roads and bridges.
“Slowly, by the end of 2014, we will rehabilitate all national roads and pave secondary national roads,” he said.
Abad said the budget also included appropriation for flood control in the National capital Region and other areas. “We have allocated P27 billion for flood control,” he said.
Meanwhile, Abad said given the higher government expenditures, the first-half budget deficit would likely be higher on a year-on-year- basis.
“That’s the greater possibility than a lower one,” he said.
Abad said the government would continue to draw funds from local borrowings. The government next year has a borrowing program of P715 billion, including P95 billion from foreign sources and P620 billion from the domestic debt market.
Abad said the expansion of the economy would enable the government to collect more taxes and finance its projects.
“Economy is expanding, therefore the ability to generate revenues also grows,” Abad said. “If you borrow less and collect more, you can spend more.”
Abad said interest payments and debt services continued to fall giving the government more leeway in spending.
The Aquino administration is looking at P266.3 trillion in budget deficit in 2014, higher than P238 trillion in 2013.
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