build me up

Government speeds up infra buildup
by Jun Vallecera/BMirror/12.09.08

THE near certainty of slower-than-anticipated growth next year has forced the government to accelerate within the month its infrastructure-buildup program, the Department of Finance said on Tuesday.

The increased spending for school buildings, roads, ports, bridges and other public structures were to help prime the economy and ensure local output will hit 4.7 percent next year in terms of the gross domestic product, Finance Undersecretary Gil Beltran said in an interview.

Next year’s growth path was seen to range lower than this year’s anticipated expansion of 4.1 percent to 4.7 percent, and will likely range from 3.7 percent up to only 4.7 percent.

“It’s been decided that infrastructure spending will increase in December as part of the pump-priming effort, and ensure next year’s growth,” Beltran said.

He stressed that Budget Secretary Rolando Andaya has kept a list of specific infrastructure programs that will be pursued in earnest under the acceleration program.

Beltran said proceeds from the sale of the government’s remaining stake in Petron Corp. for an estimated P25.7 billion were to fund the accelerated- buildup program.

He said both Finance Secretary Margarito Teves and Budget chief Andaya were hopeful the sale proceeds can be booked under the present fiscal year and disbursed accordingly.

There had been initial apprehension the sale proceeds could not be booked soon enough, denying the government the opportunity to spend for critical public structures needed to ensure continued growth next year.

But Beltran said the optimism is high that the sale proceeds will be booked within the month and disbursed quick enough, and at a level sufficient to keep the budget deficit at or around P75 billion as planned.

The actual 10-month deficit stands at only P62.5 billion—enough fiscal space to undertake heightened public-spending programs, without wrecking the carefully calibrated budgetary numbers.

Beltran said the government is conscious of the impact of probable overspending on credit markets, for instance, and vowed this will not happen.

The government has worked hard to reduce its indebtedness to only around 66 percent of GDP from 95 percent of GDP as recently as four years ago.

Beltran said keeping the year’s deficit within check means ensuring that its level this year should not exceed 0.6 percent of GDP, given that last year this already equaled a full percent of GDP.

Asset sale proceeds this year, meanwhile, were seen to end the year at P34 billion, significantly lower than last year’s P90.6 billion.

The same sale proceeds were seen to reach P10 billion up to P15 billion next year with the planned sale of the Food Terminal Inc. in Taguig City and the government’s so-called Fujimi property in Japan.