The Growth and Distributive Impacts of Public Infrastructure Investments in the Philippines
No hay miniatura disponible
Fecha
Título de la revista
ISSN de la revista
Título del volumen
Editor
Resumen
Descripción
This study investigates the role of public infrastructure investment on economic growth and poverty
reduction in the Philippines. Using a dynamic general equilibrium-microsimulation model that
explicitly models public capital as a production input, we find that the positive supply side effects of
higher public investment expenditure manifest over time, through higher capital accumulation and
improved productivity. Our findings reveal that higher public infrastructure investment not only
positively impacts real GDP, but also reduces poverty and inequality in the short and long run. In
this context, the Philippine government needs to become more proactive in finding ways to finance
higher public investment expenditures. This is especially relevant with respect to international
financing, given the narrow tax base in the country. Our simulation results confirm that international
financing is a better alternative than tax financing when considered in terms of its ability to improve
the economy’s physical infrastructure in order to create job opportunities, improve productivity and
complement its social protection measures.