Diokno: Productive spending key to sustaining growth

Finance Secretary Benjamin E. Diokno shared the government’s commitment to productive spending through investments in infrastructure that will boost economic growth during the Manila Times Midyear Economic Forum, entitled “The Financial Play After the Halftime Replay”, on June 27, 2023.

The event engaged government officials, economists, and members of the business community in discussions on crucial economic matters to address obstacles to growth and chart a comprehensive plan for the second half of 2023.

“To ensure that our growth outpaces our debt, productive spending will be of paramount importance. Hence, infrastructure spending must be kept at 5 to 6 percent of GDP annually or around 1.3 to 2.3 trillion pesos each year until 2028,” Secretary Diokno said in his pre-recorded message.

The government will bank on investments in infrastructure to generate revenues and employment in the country.

Just last month, the National Economic and Development Authority (NEDA) released the Public Investment Program (PIP) 2023 to 2028, which contains 3,770 infrastructure priority programs and projects with an indicative investment requirement of PHP17.3 trillion as of March 20, 2023.

Target sectors include transportation, agriculture, energy, digital connectivity, and water infrastructure, among others.

According to Secretary Diokno, designing a sound and effective public-private partnership (PPP) framework will be crucial in financing big-ticket infrastructure projects.

To this end, the government has taken the necessary steps to improve the efficiency and transparency of the PPP mechanism through reforms, including the revised implementing rules and regulations (IRR) of the Build-Operate-Transfer (BOT) Law, the revised Investment Coordination Committee (ICC) Guidelines on PPP approvals, and the revised NEDA Joint Venture (JV) Guidelines.

The revised BOT Law IRR determines the true cost of infrastructure or development projects to the government, consumers, and taxpayers. This ensures that the benefits and risks of PPP projects are shared equitably among all parties while protecting national interests.

Furthermore, new oversight mechanisms were introduced to safeguard compliance