Public investment is proven as the best form of public spending to increase economic output. This is the finding of the Global Infrastructure Hub from its analysis of more than 3,000 estimates of the fiscal multiplier from more than 200 academic studies. The research found that public investment has an average fiscal multiplier of about 0.8 within 1 year and about 1.5 within 2 years. Global Infrastructure Hub was formed by the G20 to provide dedicated resources to help implement the agenda on sustainable and inclusive infrastructure through action-oriented programs. At the onset of his government, President Rodrigo Duterte promised to increase government spending on infrastructure as percentage of Gross Domestic Product (GDP) at par with the global standards. His promise led to the development of the Build Build Build infrastructure development program which includes high-value infrastructure projects that are expected to increase the productive capacity of the economy and improve the business environment of the country. Based on the data compiled by the National Economic and Development Authority (NEDA) from 2011 to 2016, government spending on infrastructure as percentage of GDP averaged at 3.0%. But under the renewed infrastructure development program, government spending on infrastructure as percentage of GDP averaged at 4.9%. Despite the budget limitations caused by the pandemic, the government stated that government spending on infrastructure as percentage of GDP could increase to 5.7% in 2021. Although an elevated political risk due to the upcoming national election could prolong the unprecedented pandemic-driven economic crisis, investors should include infrastructure-related stocks in their portfolio as the country enters the golden age of infrastructure. Most of these stocks are undervalued by the market due to government bureaucracy rather than company fundamentals. Although the recent regulatory debacle with several infrastructure-related companies dented government reputation as a business partner, investors should remain steadfast and adaptable to the changing political landscape. The golden age of infrastructure has just begun and would usher in tremendous business opportunities to the infrastructure-related companies where investors could take part. Since most infrastructure-related stocks remain at oversold levels despite the muted community quarantine and modest market recovery, this could be the best time to include them in your portfolio and wait for the market to agree with the narrative that the golden age of infrastructure could be the goose that lays the golden eggs. Good things come to those who wait but only what is left from those who hustle.
