Government infrastructure spending down 18%

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Credit: Read the original article from PhilStar Business.

Government infrastructure spending down 18%

Mary Grace Padin (The Philippine Star) – December 11, 2020 – 12:00am

MANILA, Philippines — Public spending on infrastructure declined by 18.4 percent from January to October  due to the delays in construction activities, as well as the discontinuance of some projects amid the coronavirus pandemic, the Department of Budget and Management (DBM) reported yesterday.

Despite the drop, the  DBM remains hopeful  infrastructure disbursements will exceed this year’s   target, with key agencies ready to roll out catch-up measures.

Based on the latest data from the DBM, infrastructure and other capital outlays amounted to P508.5 billion from January to October, down more than 18 percent from P622.9 billion in the same period last year.

The DBM said this was mainly due to  the delays in the construction of some public works, as well as the discontinuance of some projects due to the  pandemic and the imposition of lockdowns.

“As noted earlier, the implementation of some government infrastructure projects has been hindered by various delays, especially during the imposition of community quarantine measures in the earlier part of the year to contain the spread of the COVID-19 virus,” the DBM said.

For October alone, infrastructure expenditures contracted by more than 30 percent to P57 billion from P82  billion in the same month in 2019. This was the fourth consecutive month that a decline was reported since July this year.

According to the DBM, the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) reported a decline in their infrastructure spending during the month, which was slightly tempered by the increase in disbursements under the Armed Forces of the Philippines Modernization Program.

Despite the slower  spending on public works, DBM Assistant Secretary Rolando Toledo said the budget department expects infrastructure expenditures to exceed the program this year.

“Based on the notice of cash allocation or NCA releases we have made and the catch-up plans discussed with the agencies, we expect these infrastructure disbursements to further rise for the rest of the year and amount to around P660 billion for the year, exceeding the program by about P50 billion or 8.2 percent,” Toledo told The STAR in a text message.

In an earlier statement, the Bureau of the Treasury (BTr) said the decline in capital outlays, coupled with the base effect of pension differential  which was released last year, pulled down government disbursements to P289.6 billion in October.

Nonetheless, the BTr said year-to-date spending still rose by nearly 13 percent to P3.31 trillion from P2.94 trillion in the first 10 months of last year, propelled by the government’s COVID-19 emergency response and assistance programs.

Going forward, the DBM said releases under the Bayanihan to Recover as One Act would drive disbursements close, if not meet the revised full-year program of P4.23 trillion.

“This is especially true since, historically, spending tends to accelerate in the latter part of November to December as line agencies try to complete their programs and projects and settle payables before the year ends,” the DBM said.

Based on the latest data from the DBM, allotment, which was released under the Bayanihan 2, has already reached P97.26 billion as of Dec. 7.

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