Improving Public Infrastructure in the Philippines
IMF Working Papers, February 29, 2016
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Bibliographic details
- Authors: Takuji Komatsuzaki
- Published: February 29, 2016
- Series: IMF Working Papers
Summary
- This paper explores the macroeconomic effects of improving public infrastructure in the Philippines.
- Methodology: benchmarking the Philippines relative to its neighbors in terms of level of public capital and quality of public infrastructure, and public investment efficiency; then using model simulations to assess the macroeconomic implications of raising public investment and improving public investment efficiency.
Main results / findings
- Increasing public infrastructure investment results in sustained gains in output.
- The effects of improving public investment efficiency are substantial.
- Deficit-financed increases in public investment lead to higher borrowing costs that constrain output increases over time, underscoring the importance of revenue mobilization.
Policy implications and emphasis
- Raise public infrastructure investment to achieve sustained output gains.
- Improve public investment efficiency to amplify macroeconomic benefits.
- Prioritize revenue mobilization when scaling up public investment to avoid higher borrowing costs that could constrain output increases over time.