Duterte admin says absorptive capacity problem now ‘solved’

CLARK FREEPORT, Pampanga — The government declared on Monday that it has solved the problem of absorptive capacity, as infrastructure projects are now moving faster than expected.

In a speech before the business community, Finance Secretary Carlos Dominguez III said the government spent P571 billion in the first nine months of 2018 on infrastructure alone, 7.2 percent above target and 46 percent higher than the same period last year.

“It demonstrated that the Department of Public Works and Highways and the Department of Transportation, the two lead agencies in the Build, Build, Build program, are moving faster than expected,” Dominguez said.

“The old problem of absorptive capacity has been solved. The mantra of fast and sure is being observed,” he said.

Absorptive capacity is the ability of the government to implement projects and investments to achieve their objectives.

The Duterte administration plans to spend over P8 trillion on its Build, Build, Build infrastructure program until 2022, largely funded by tax revenue.

Dominguez opposed claims that the Philippines is in danger of drowning in Chinese debt, dismissing such remarks are unfounded.

According to independent economic consultant John Paolo Rivera, however, the absorptive capacity problem is still not totally solved.

"To some extent, yes, but not totally. It's because there is still an obvious/apparent shortage in transportation service. Hard infra is increasing, but soft infra is not yet sufficient," he said in a text message.

Pressed to elaborate, Rivera said there needs to be more initiatives to address transportation needs in the country.

"We may have hard infra, but soft infra—TNVS [Transport Network Vehicle Services], traffic rules, etc, are weak," said Rivera. —VDS/BM, GMA News