MANILA – The government declared yesterday that it has solved the problem of absorptive capacity, as infrastructure projects are now moving faster than expected.
In a speech before the business community, Finance secretary Carlos Dominguez III said the government spent P571 billion in the first nine months of 2018 on infrastructure alone, 7.2 percent above target and 46 percent higher than the same period last year.
“It demonstrated that the Department of Public Works and Highways and the Department of Transportation, the two lead agencies in the ‘Build, Build, Build’ program, are moving faster than expected,” Dominguez said.
He added: “The old problem of absorptive capacity has been solved. The mantra of fast and sure is being observed.”
Absorptive capacity is the ability of the government to implement projects and investments to achieve their objectives.
The Duterte administration plans to spend over P8 trillion on its “Build, Build, Build” infrastructure program until 2022, largely funded by tax revenue.
Dominguez opposed claims that the Philippines is in danger of drowning in Chinese debt, dismissing such remarks are unfounded.
“There is no danger for us being drowned from Chinese debt,” Dominguez said in a speech before the business community during the Sulong Pilipinas 2018.
Citing data from the DOF International Finance Group, Dominguez said the loan from China accounts for only 0.11 percent of the country’s total debt.
“We borrow with great prudence, aware that it is the taxpayer who ultimately pays for the debt,” Dominguez said.
“Thus we take care that the funds we borrow are wisely used and produce sufficient economic benefits to make the debt service easier down the road,” he added.
Under the Duterte administration, the Philippines has so far finalized two loan agreements with China – the $72.49-million deal for the Chico River Irrigation project and the P18.724-billion deal for the New Centennial Water Source-Kaliwa Dam Project. (With reports from GMA News/PN)
