Government to set up $10-billion infrastructure fund

Government to set up $10-billion infrastructure fund

The Aquino administration plans to start a $10-billion infrastructure fund in October to finance rail and port projects, finance officials said.

Revenue Commissioner Kim Henares said the government is currently discussing the project with fund managers and investors who can put their free assets in infrastructure.

The government is tapping the private sector to finance infrastructure projects so government funds can be concentrated on social services.

The administration plans to cut the budget gap, which is expected to reach P325 billion this year, to two percent of the gross domestic product by 2013 without raising or creating new taxes.

As of July, the budget shortfall had widened to P229.4 billion – 70.6 percent of the target this year.

Finance Secretary Cesar Purisima said the government is also discussing the fund with the World Bank and Asian Development Bank.

“We’re currently under negotiations with different entities to pool funds in pesos that’s low cost and long-term so there’s a match with our revenue flow on the infrastructure project,” he said.

Purisima said American companies have disposable funds they can invest.