DBM underscores need to narrow financing gap in infrastructure, climate change programs
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| Pangandaman |
Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman underscores the need to address financing gaps in infrastructure and climate change programs to achieve the country’s economic and social goals.
The Budget Secretary believes that the Philippines should ramp up its infrastructure investments while addressing climate change, which plays a big role in infrastructure planning and development.
“Numerous articles have mentioned that the Philippines is two to three decades behind on infrastructure despite the increase in public expenditure. So we need to act fast. No more delays. Now is the best time to close the infrastructure gap,” Secretary Pangandaman said.
“But, while it is true that fast-tracking the completion of the needed infrastructure is vital to the country's recovery, it likewise plays a crucial role in addressing climate change. Climate change, on the other hand, plays a big role in infrastructure planning and development. Everything is interconnected,” she continued.
According to the Asian Development Bank (ADB), the estimated total infrastructure investment need of ASEAN is at $2.8 trillion (baseline) and $3.1 trillion (climate-adjusted), placing the annual investment need at $184 billion and $210 billion, respectively.
These figures do not include the additional expenditure associated with climate change that highly impacts existing infrastructure in Southeast Asia. This is crucial, especially in the Philippines given our country’s vulnerability to climate-related weather events. In fact, according to the long-term climate risk index for 2000–2019, the Philippines ranks amongst the 10 countries most affected by weather-related loss events and is most vulnerable to climate-linked risks.
To help close the financing gap in infrastructure and climate change programs, Secretary Pangandaman highlighted that under President Ferdinand R. Marcos Jr. administration’s Medium-Term Fiscal Framework, the Philippines aims to maintain high infrastructure spending at 5 to 6 percent of the annual GDP from 2022 to 2028.
For 2023, the PBBM administration has allocated P1.3 trillion in the FY 2023 National Budget to sustain the momentum of the public infrastructure under the “Build, Better, More” program. This includes P478.7 billion for roads, P283.2 billion for flood control infrastructure, P164.1 billion for local infrastructure development, P48.1 billion for buildings, and P40.1 billion for railways.
Meanwhile, a total of P464.5 billion budget has been allocated to address climate change, equivalent to 8.8 percent of the total national budget. This is significantly higher compared to the 2022 allocation of P289.7 billion.
It covers funding for water sufficiency projects, as well as sustainable energy and food security. Programs such as the Flood Management Program of the Department of Public Works and Highways and the National Greening Program of the Department of Environment and Natural Resources were also given priority.
“Narrowing the gaps in infrastructure and climate change programs, however, is not the sole job of the government. Apart from national government funds, there are various financing options such as ADB facilities, local or international markets, private sector investments, and climate-related financing innovations,” Secretary Pangandaman said. (DBM/PIA Caraga)
