Super region projects covered by adequate funds - Andaya
Quezon City (5 October) -- Budget Secretary Rolando Andaya Jr. said last night that multi-billion-peso projects under the super region development program that President Gloria Macapagal-Arroyo spelled out in her 2006 State of the Nation Address (SONA) are backed up by adequate funding.
"Yes, we can sustain it" with the needed financing up to 2010 and beyond, Andaya said, referring to the super region projects.
The Department of Budget and Management (DBM) secretary made the assurance during the "Government Infrastructure Forum" hosted by various chambers of commerce and other major business organizations in the country held at the Dusit Hotel Nikko in Makati City Wednesday.
The DBM launched early this year new public expenditure reforms, including the "paper on budget strategy," the costing of ongoing programs in three-year forward estimates (FEs), and adopted the Medium Term Expenditure Framework (MTEF).
The FEs determine the allocable fiscal space, thus resulting in the maximization of funds for priority sectors such as infrastructure, education, health and social services.
"Through the FEs, we are able not only to determine the allocable fiscal space. Forward estimates also give assurance for sustained funding for approved programs and policies, thus, financial sustainability over the duration of the projects are assured," Andaya said.
He said if the government's strong revenue program and collection efforts are sustained, the total fiscal space based on the FEs would reach P527.2 billion from 2007 to 2010.
Andaya said this amount is more than enough to meet the funding requirements of the projects in the super regions estimated at P369.3 billion for the period 2007-2010.
The total investment cost, he added, will be shared by the private sector at P67.7 billion, government-owned and controlled corporations (GOCCs), P115.6 billion; local government units (LGUs), P1.3 billion, and the national government, P184.5 billion.
"The fiscal space to fund the SONA projects between 2007 and 2010 is P527.2 billion which is sufficient to cover 100 percent of the total investment cost of P369.3 billion. Given a strong revenue performance from 2007 to 2010, we can say with confidence that the SONA investments requirements can be adequately addressed by the government," Andaya said.
By project category, Andaya said rail programs have the biggest funding requirements, followed by roads and airports. Together, the three project categories account for 87 percent of the total funding requirement, or P322.24 billion.
The rail systems are the Northrail project from Malolos to Clark, with a funding requirement of P39.3 billion, and the Southrail project linking Metro Manila and Calamba and up to Bicol, P48.5 billion.
The major road projects are the Davao-Compostela Valley Road, P8 billion; Surigao-Davao Coastal Road, P5.87 billion; El Nido-Bataraza Road in Palawan, P4.29 billion, and the North Luzon Expressway-C5-South Luzon Expressway link, P3.42 billion.
The major airport projects Andaya identified are the Diosdado Macapagal Airport in Clark, P8.39 billion; Daraga Albay International Airport, P3.44 billion; New Iloilo Airport, P8.7 billion, and Silay Airport, P5.7 billion.
Andaya said next year, the national government’s allocation for infrastructures of P17 billion will be spent mainly on airports and roads.
"These investments are already embedded in the National Expenditure Program for 2007 which is presently being deliberated by Congress. We hope for the early passage of the 2007 annual General Appropriations Act (GAA) so we can start project implementation before the election ban takes effect," he said.
Andaya's statements complemented those of Finance Secretary Margarito Teves who said the government expects to improve national revenue collection efforts to generate about P6.5 trillion over the medium term.
"Roughly, this will amount to an average of about P1.3 trillion per year," Teves said.
Using conservative estimates, not to mention the current practice of allocating 20 percent of revenues for capital outlay, Teves said the national government would easily raise at least P200 billion to finance major infrastructure projects in the super regions.
The balance of the funding requirements will be sourced from the LGUs, GOCCs, government financing institutions (GFIs), and the private sector, Andaya said.
"Rest assured that your government will continue working together to implement vital infrastructures that enhance our global competitiveness, encourage economic growth and create jobs, and leave behind a legacy of sustained development, prosperity and progress to generations of Filipinos to come," Teves said. (PIA) [top]