* Manila proposes $9.6 billion infrastructure spending
* Gov't forecasts growth of 6 to 7 pct in 2013
(Adds quotes, background)
MANILA, July 9 The Philippines plans to spend a
record 404.6 billion pesos ($9.6 billion) on infrastructure next
year as it aims to push its growth rate to 8 percent in
subsequent years, Budget Secretary Florencio Abad said on
The Southeast Asian economy could see growth accelerate to
the highest levels since democracy was restored in 1986, he
said, supported by higher state spending, strong domestic
demand, remittances and other factors.
Abad said it is possible growth could be 7-8 percent in 2015
and 7.5-8.5 percent in 2016.
He told reporters that the budget for next year will include
infrastructure spending that's more than 19 percent above the
339.3 billion pesos allocated for it in this year's budget.
With the increased infrastructure spending, "you can imagine
the impact on employment, on reducing costs of doing business as
well as expanding opportunities for the private sector," Abad
The government does not plan new taxes in 2013, but is
forecasting that its overall revenue will increase 14.1 percent
from this year's level.
However, Abad said next year's allocation on infrastructure
could increase if proposed reforms on cigarette and tobacco
taxes are passed into law, generating more revenue.
Manila will propose to Congress a 10.5 percent increase in
its spending budget to 2.01 trillion pesos ($48 billion) for
2013 against this year's 1.82 trillion pesos, Abad said.
He said the percentage of the new budget going to social
services would be increased to 34.8 percent from this year's
The government wants to achieve annual growth of 7 to 8
percent within President Benigno Aquino's six-year term to make
a serious dent in poverty. About one-third of the country's 94
million people are poor.
In the first quarter of 2012, the economy grew 6.4 percent
year-on-year, second only to China among Asian economies, and
Aquino told Reuters last week he expected the pace to accelerate
in the second quarter.
Abad said the government is sticking to this year's growth
target of 5 to 6 percent, despite the economy's impressive first
quarter because of the uncertainties stemming from the debt
crisis in Europe and slowing U.S. and Chinese economies.
Growth should rise to between 6 to 7 percent next year,
followed by 6.5 to 7.5 percent in 2014, Abad said.
Ratings agencies, which have updated their views on the
Philippines, have said the country must lift its long-term
growth potential through higher investments if it wants to
secure investment grade status.
($1 = 41.97 Philippine pesos)
(Reporting by Karen Lema; Editing by Richard Borsuk)