Massive public infrastructure spending has been the classical, standard cure for a deep economic downturn.
Economists refer to it as a counter-cyclical or reflationary maneuver.
Also called “pump-priming,” the surefire formula for restarting economic growth calls for massive spending on public infrastructure nd related construction activities that entail huge cash expenditres, purchase of capital equipment, and massive employment
The Duterte administration is already doing this through its ambitious “Build, Build ,Build” infra overdrive..
And so we fully agree with and strongly support Sen. Imee Marcos in calling on the Duterte administration not to give up infrastructure projects in its BBB program to fund the fight against the Covid-19 pandemic.
Marcos, who chairs the Senate committee on economic affairs, said the government should consider a "bid-build-build option" by auctioning parts of BBB projects to private bidders, which is aligned with the public-private partnership concept.
"Long- delayed PPP and local joint-venture projects should finally be decided and urgently green-lighted. So many PPP have been pending with government in the past four years!" she explained.
"Private bidders with cash and generosity to spare can help the government in this time of crisis by bidding for parts of BBB projects," the lady lawmaker added.
"More innovative solutions are needed to shore up dwindling government funds and keep the economy afloat while COVID-19 stays around," Marcos said.
She agrees with the government's position that the BBB program "must push onward with minimal compromise," to jumpstart the economy from its passive state once the pandemic eases.
Thousands of construction workers would also be able to keep their jobs and find new ones if BBB projects continue, Marcos added.
,At the Lower Houmze Albay Rep. Joey Salceda, chairman of the Ways and Means Committee, has stressed the need for an “enhanced BBB” to keep the economy afloat amid the downturn of the coronavirus pandemic.
In a brief note on structural stimulus tools, Salceda said infrastructure is one of the best public investments during an economic crisis because it induces both consumption and investment.
He noted that the economic multiplier of infrastructure can be as high as 3.66, while its Year 1 multiplier can be as high as 1.02, suggesting that every peso spent on infrastructure yields an additional peso for consumption and investment.
“We estimate that every P200 billion in infrastructure can create up to 463,000 jobs on the year it is spent,” he said as he warned that cutting infrastructure spending could lead to job losses.
“As I said before, speed is your friend, delay is your enemy -- in economics and in pandemic response. So we must prioritize mainly on the basis of speed,” the Bicolano lawmaker added.
Salceda proposed a framework for infrastructure as stimulus wherein prioritization criteria would be exercised in the implementation of infrastructure projects: 1) high economic value; 2) can be completed within President Duterte’s term; 3) high potential for job creation.
He also stressed the need for sectoral focus of the BBB program, particularly on health, education, and creative infrastructure.
He said the Covid-19 crisis should serve as an opportunity for the country to assess the preparedness of its health care system for universal coverage during the most difficult conditions.
“Covid-19 has been the first serious test for our hospitals and medical facilities after the passage of the Universal Health Care Law. We should assess where public medical facilities were unable to meet the full demands of Covid-19, and how these hospitals can be improved,” he said.