July 31, 2011, BusinessWorld Online

INFRASTRUCTURE budgets for next year have been increased by the government in a bid to set the foundation for economic growth.

“Rapid, inclusive and sustained economic development does not only require significant spending on public infrastructure. It also requires that these infrastructure projects and other activities are implemented in a focused and cohesive manner,” Budget Secretary Florencio B. Abad said in a statement issued yesterday.

To support growth, the Department of Budget and Management (DBM) has proposed a P438.9-billion economic services sector outlay in the 2012 national budget, an increase of over a fifth from this year’s P361.9-billion allocation.

The economic services sector is focused on supporting five priority areas for job generation and economic development, Mr. Abad explained. On top of established drivers such as semiconductors and electronics, emphasis will also be placed on business processing outsourcing, tourism, agriculture and fisheries, as well as general infrastructure development.

A total of P255.2 billion will go to the infrastructure and capital outlay for next year, rising by more than a third from this year’s P191.7 billion. The Department of Public Works and Highways (DPWH) will receive P38.5 billion to support the completion of the country’s network of primary and secondary roads and bridges by 2016.

Tourism development, meanwhile was allocated an P8.1-billion budget for 2012, increasing more than fourfold from this year’s P1.8 billion. It will be used for the construction of 1,071 kilometers of access roads to tourist destinations.

Various airport projects also secured funding in the 2012 national expenditure program such as the New Bohol Airport Development Project (P1.2 billion), Puerto Princesa Airport Development Project (P1 billion) and the New Legazpi Airport Development Project (P500 billion).

Moreover, the Department of Agriculture’s National Irrigation Authority was allotted P24.8 billion next year for the construction and rehabilitation of irrigation systems, almost double this year’s P12.8 billion. This is expected to finance the irrigation of 214,055 hectares.

Lastly, Strategic Support Funds will be set aside in aid of the government’s cornerstone public-private partnership (PPP) program. Some P3 billion and P8.6 billion will go to the DPWH and the Department of Transportation and Communications, respectively, for their preparation of business cases and feasibility studies.

“We are sustaining public-private partnerships as an innovative strategy to boost the economy and given our budgetary constraints for critical infrastructure,” Mr. Abad said.