MANILA, Jan 23 (Mabuhay) — The Duterte administration’s “ambitious” infrastructure program is “financially feasible” under the new tax reform law as well as the wise fiscal management of past administrations, and the declining debt service payments, A Department of Finance (DOF) official claimed on Tuesday.
The newly-implemented Tax Reform for Acceleration and Inclusion law will “partly fund” the “Build, Build, Build” program given that 70 percent of any incremental increase in revenues from its implementation will be earmarked for infrastructure, Finance Undersecretary Grace Karen Singson said in a statement.
The infrastructure strategy will be funded in a “fiscally responsible and sustainable” way, while the government aims to keep the budget deficit at three percent of the gross domestic product “so that national government’s debt-to-GDP ratio target of 37.7 percent could be attained by the end of the Duterte administration,” Singson noted.
She said the government “can afford” spending on infrastructure “given the ample fiscal space that the economy has right now as a result of the sound fiscal management of past administrations.”
She cited a “more manageable” debt servicing, a “maturing debt profile,” and the affirmation by credit rating agencies of the “strength and resilience” of the Philippine economy, as well as investors’ view that “government debt is now safer than ever.”
Aid and investment pledges from China and Japan worth $7.3 billion and $1.2 billion, respectively, will be spent on infrastructure, rebuilding war-torn MarawiCity, and maritime capability reinforcement.
The government is rolling out 76 big-ticket infrastructure projects worth P1.1 trillion this year. (MNS)