Massive infrastructure to launch this year

According to the Department of Finance, Duterte administration’s massive infrastructure is expected to be launched this year followingimplementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

Under the BUILD BUILDBUILD Program, the recently enacted TRAIN law would enable the government to create revenue required tobankroll the first set of big-ticket infrastructure projects said Finance Secretary Carlos Dominguez.

"Im sure the projects that have been planned for the DPWH (Department of Public Works and Highways) are going to go into highgear now that we have basically our capital already our own funding for our portion of these projects” Dominguez added, referring tothe recent implementation of the train.

The Philippine National Railway (PNR) North 2 project which would connect Manila to Clark International Airport that is among thebig-ticket projects would also commence this year.

A total of 44 infrastructure public projects with a total cost of about P1 trillion are under construction as of early 2018, according todata from DOF.

The DOF said that most of these projects would most probably start their implementation this year. About 15 others, worth P1.01trillion are in the pre-construction stage.

Projects that are currently in pre-construction phase includes the P355.6 billion Mega-Manila Subway Project and the P134 billionPNR South Commuter Line, the P211.46 billion Malolos-Clark Railway, and the P25.5 billion Metro Manila Flood Control project,among others.

Financing aids from the country’s development partners would add to the incremental revenue from the tax reform law in funding ofinfrastructure projects of the Duterte administration.

About a fourth of the capital needed for the government’s P8.4 trillion Build BuildBuild program would be coming from TRAINrevenue, while the rest of the fund would come from Official development assistance (ODA).

The finance chief did assure that the government would be prudent when managing its liabilities to ensure the country’s fiscalstability and to maintain its declining debt-to-gross domestic product (GDP) ratio.

In Finance Undersecretary Gil Betran’s last economic bulletin, the share of the national government’s debt to GDP in 2017 has beenmaintained at 42.1 percent from the end-2016 level.

Despite the rollout out of the Build BuildBuild program as economic growth to outpace increase in debt, Beltran expects thegovernment’s debt-to-GDP ratio to sustain its downward momentum.

“In the short-term, the government’s Build BuildBuild program may exert upward pressure on the debt stock. In the medium to longterm, however, a sustainable high economic growth rate (brought about by better infrastructure) will outrun the growth of debt,”Beltran said.