The Duterte administration’s ‘ Golden Age of Infrastructure ” will not only sustain the Philippines’ growth momentum, but would also create more jobs and thereby lead to economic inclusion for all Filipinos, according to Department of Finance (DOF) Secretary Carlos Dominguez III.
“One of our big problems in this country is the large percentage of workers who are underemployed. The unemployed is only about five or six percent. But the underemployed is something like 16 percent. So by doing the infrastructure projects outside of the Mega Manila area, I think we will be creating jobs and bringing in people into the economy,” said Dominguez at a recent forum.
Jobs data released by the Philippine Statistics Authority pegged the unemployment rate at 6.6 percent and underemployment at 16.3 percent of the labor force as of January this year.
According to the International Labor Organization (ILO) for every $1 billion spent on infrastructure in developing economies, 200,000 direct jobs are created per year.
In step with its “DuterteNomics” economic strategy, the government is planning to spend some P8.4 trillion on its unprecedented infrastructure program, dubbed as the “Build, Build, Build” agenda, over the medium term or about $168 billion in the next five years.
Based on estimates done by the National Economic and Development Authority (NEDA), the ” Build, Build, Build ” program is expected to generate 106,824 additional jobs this year; 823,696 jobs in 2018; 1,115,999 jobs in 2019; 1,228,964 jobs in 2020; 1,399,463 jobs in 2021; and 1,705,021 jobs in 2022.
“I was just telling [Budget Secretary] Ben [Diokno] here that if we’re lucky, we’ll run short of workers. If we’re lucky enough to get the projects really going, we will have that problem of success, that we will not have enough workers. That means to say prices of labor are going to go up. So that’s part of economic inclusivity,” said Dominguez at the forum.
The top 10 sectors where the NEDA expects to generate the most jobs under this ambitious infra program are in construction; wholesale and retail trade; wood, bamboo, cane and rattan articles; forestry; fabricated metal products; stone quarrying, clay and sandpits; land transport; non-metallic mineral products; gold mining; and renting and other business activities.
While the average rate for infrastructure spending in the past administrations was 2.6 percent of the GDP, the Duterte presidency plans to ramp it up to 5.3 percent of GDP for this year alone with an infra budget of P847 billion.
The Duterte administration plans to gradually increase the public infrastructure budget to P 1.2 trillion in 2018; P 1.3 trillion in 2019; P1.5 trillion in 2020; P1.7 trillion in 2021; and P1.9 trillion in 2022.
“Dutertenomics,” is President Duterte’s economic strategy to dramatically raise funds–in large part through his proposed tax reform program–and spend big on infrastructure, human capital formation and social protection to sustain the growth momentum, attract investments and create jobs, achieve economic inclusion and transform the Philippines into a n upper middle-income country by 2022, by which time poverty incidence will have been reduced to 14 percent.
If “DuterteNomics” is sustained over the medium and long term, the government envisions the Philippines to be a high-income economy in one generation or by 2040.
According to Dominguez, the ” Build, Build, Build ” program will be funded by a combination of resources from its proposed comprehensive tax reform program (CTRP), foreign development aid and commercial loans.
He said the first package of the CTRP, which is now pending in the Senate, will serve as the “cornerstone” of the funding for the government’s ambitious infrastructure program.
The House of Representatives approved its version of Package 1—House Bill No. 5636—last May 31 by a 246-9 vote with one abstention.
HB 5636 had consolidated the DOF-endorsed HB 4774 authored by Quirino Rep. Dakila Carlo Cua with 54 other tax-related measures.
