Focus On Small-Scale Agriculture Infrastructure

With the rising costs of commodities, the government should allocate its planned borrowings to initiatives that would address the current economic challenges faced by Filipino, instead of big infrastructure projects.

Research and advocacy group IBON Foundation argued that while debt itself is not necessarily a bad thing if used the help the economy grow, the issue now lies in where the borrowings will be allocated.

“That’s where we disagree, with so much going to infrastructure projects. You’re not going to outgrow debt because you are draining resources in the economy,” IBON executive director Sonny Africa said.

“If the government wants more bang for their buck, you should borrow not for big-ticket infrastructure projects. You should borrow for small-scale agriculture infrastructure,” Africa added.

Africa said the government should focus on projects that would be beneficial in addressing the current problems faced by Filipino consumers, especially the high cost of commodities.

“Sure, borrow, but borrow and spend it on agricultural infrastructure to spur income and productivity in the sector,” Africa said.

“Because infrastructure on its own without corresponding agricultural industrial development plan will just reinforce that exact same service and export orientation that we have right now,” he added.

Additionally, IBON said another way to lower the reliance on borrowing is to improve the country’s tax system.

“We are more reliant on indirect taxes such as VAT (value added tax) and excise and these limit what you can earn from poor middle-class Filipinos,” Africa said.

“If the government really wants to be solid in solving its revenue problem, it should stop giving tax breaks to large corporations. A progressive tax system that taxes those with the ability to pay more is the best way to lower the government’s reliance on debt,” he said.

Source: Philstar