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The growth and distributive impacts of public infrastructure investments in the Philippines

Author

Listed:
  • Taningco, Angelo
  • Corong, Erwin
  • Dacuycuy, Lawrence
  • Reyes, Rachel

Abstract

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Taningco, Angelo & Corong, Erwin & Dacuycuy, Lawrence & Reyes, Rachel, "undated". "The growth and distributive impacts of public infrastructure investments in the Philippines," PEP Policy Briefs 159874, Partnership for Economic Policy (PEP).
    • Handle: RePEc:ags:peppbr:159874
    DOI: 10.22004/ag.econ.159874
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    File URL: https://ageconsearch.umn.edu/record/159874/files/1360695751-112.MPIA-12302.pdf
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    Cited by:

    1. Chen, Zhenhua & Daito, Nobuhiko & Gifford, Jonathan L., 2017. "Socioeconomic impacts of transportation public-private partnerships: A dynamic CGE assessment," Transport Policy, Elsevier, vol. 58(C), pages 80-87.

    More about this item

    Keywords

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    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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