Infrastructure Projects Must Remain the Priority for the Next President of the Country – DOF

The Department of Finance (DOF) said the budget for infrastructure projects must remain the priority for the next President of the country considering the economic adjustment from the debt and budget deficit caused by higher expenditures but lower revenue due to the COVID-19 pandemic.

President Duterte’s economic team, led by the Department of Finance, will hand over a fiscal consolidation plan to the next administration, that might include the latest taxes, reduced government funds for non-priority sectors, and economic boosters to restore the country’s budget deficit before the pandemic. 

“It is important that infrastructure investments be continued. Cutting infrastructure spending may narrow down the deficit momentarily but will definitely be counter-productive in the long run as far as economic recovery is concerned.” DOF chief Economist and former undersecretary Gil Beltran said. 

Meanwhile, Beltran also mentioned CREATE (cutting corporate income taxes), economic liberalization, and infrastructure investment as the “key ingredients” in the economic recovery, and this could attract future investors.

“…infrastructure projects that are left unfinished do not inspire investor confidence,” Beltran added. 

Fitch Ratings recently asserted its ‘BBB’ rating on the countries and its Negative Outlook remained unchanged. Meanwhile, the Negative Outlook indicates concerns about medium-term growth prospects as well as obstacles in lowering the debt-to-GDP ratio. S&P and Moody’s disagreed with Fitch’s rating and retained the country’s investment-grade rating to Stable Outlook. 

Source: DOF