Weekly Commentary – Infrastructure building lead the Philippine to grow
Infrastructure building will help economic growth, especially, after the typhoon swept across the Philippine. Infrastructure building was not enough in the Philippines, where ranking 98th out of 144 countries according to World Economic Forum in 2012. Total spending on infrastructure building in the Philippines is only 20% of national GDP, compared with 33% for Indonesia.
The government is making remedy. The president plans to raise government spending on roads and bridges to 5% of GDP by 2016 from currently 3%. The government has space to increase government spending as the government financial position improves. Half of the government debt’s durations are 10 years or longer. Government income also increased after Mr. Aquino attacked graft and improved transparency by allowing online bidding for government contracts.
Infrastructure building’s plan should help the economy grow 7%, according to Nomura’s expectation. Temporally, the Philippine still need a lot of aid from abroad to recovery from the disaster. But the country will be better as its rebuild and Infrastructure building.
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