Press Release
May 5, 2007

100 yrs to wipeout infra backlog unless
20% of revenues is earmarked for infra - Recto

Government should begin earmarking 20 percent of its revenues for infrastructure if it wants to lick the backlog in public works, create jobs and attract investments, Sen. Ralph Recto said.

The budgeting rule should be this : Twenty centavos for every tax peso paid in a year should automatically go to building roads, schools, irrigation, hospitals in the following year, Recto said.

Recto said share of infrastructure in the national budget has been stuck at below ten percent for years now.

This years allocation for public works, he said, while nominally impressive at P83 billion is just 7.8 percent of the P1.126 trillion national budget.

But if, for example, the rule that 20 percent of tax collections in the previous year will be utilized for public construction projects in the next, then this years infra budget : would have been P170 billion, based on 2006 Bureau of Internal Revenue and Bureau of Customs collections, Recto explained.

At present spending pace, it will take the country more than 100 years to wipe out the infrastructure backlog, and this is assuming that our population will not grow.

Signs of infrastructure deficit, he said, are evident, from a rundown domestic airport to a dilapidated train system, to city streets crawling with car traffic to antique sewerage system.

To solve these we must launch an infrastructure catch-up plan, by using budgetary earmarks for capital outlays, he said.

By setting aside a portion of government income to infrastructure, earnings will not be used to retire debts or be used up entirely to meet payroll pressures, Recto explained.

Recto said an infrastructure boom is a shortcut to creating jobs, either directly by the construction industry or by economic activities that will be created with completion of road or a port for example.

A tourist or farm road, or a port, once completed spurs trade and commerce which in turn create more jobs, he said.

Good infrastructure, he said, is the perfect complement to our trained manpower in drawing in investments. Those who have traveled to other countries like China would readily conclude that the main reason why we have not been able to attract investments is our lack of infrastructure.

He added that high-profile and big-ticket infra projects, those that tickle the national pride, would show people where their tax payments go and will encourage tax law compliance.

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