Catching up - after years of infrastructure neglect and low levels of social spending, the Aquino administration is poised to intensify investments in physical and human capital that promotes growth and substantially benefits a greater number of Filipinos. For 2014, the proposed infrastructure outlay is set at 3% of GDP which is twice the size of the 2011 budget of 1.5% of GDP. Budget allocation for the social sector - which covers education, health and other social services – will likewise grow from 4.6% of GDP in 2010 to 6.3% in 2014.
Meanwhile, other Asian countries have long set their infrastructure budget to at least 5% of GDP. Also, spending on public education by World Bank member countries averaged 4.6% of GDP from 2006 to 2010 while that of public health averaged 6.1%. In short, the Philippines has more catching up to do.
A bigger budget envelope would necessarily require more public funds. As envisioned in the Philippine Development Plan, the revenue-to-GDP ratio must increase from 14.5% in 2012 to at least 16.9% in 2016. This is to keep up with the present revenue efforts of other countries in the region, specifically Vietnam (25.1%), Malaysia (22.1%) and Thailand (19.1%). As it is, the level of government spending towards inclusive growth is largely constrained by the availability of public resources.>>read complete document
