Infra spending surged in Sept, up 16.9%

State spending on infrastructure went up by 16.9% in September fueled by disbursements for finished transport projects, the Department of Budget and Management (DBM) said.

In the latest National Government disbursement report, spending on infrastructure and other capital outlays rose by P19.8 billion to P137.1 billion in September from P117.3 billion in the same month last year.

Month on month, infrastructure spending went up by 26.24% from P108.6 billion in August.

The DBM attributed the uptick in September disbursement to the payment for completed road network and bridge programs of the Department of Public Works and Highways (DPWH).

Higher disbursements were also made for various foreign-assisted projects of the Department of Transportation.

It also noted capital outlays for local counterpart requirements for implementing the Metro Manila Subway Project Phase 1, North-South Commuter Railway System, and the Davao Public Transport Modernization Project.

Funds were also used for the Department of National Defense’s (DND) Armed Forces of the Philippines modernization program, as well as the construction and repair of justice halls nationwide and implementation of the Department of Education’s computerization program.

In the January-to-September period, infrastructure spending rose by 14.6% to P982.4 billion from P857.6 billion in the same period in 2023.

“The robust spending growth for the period was largely credited… to infrastructure and other capital outlays with significant disbursements recorded in the DPWH for its banner infrastructure projects and the DND for its defense modernization projects,” the DBM said.

Overall infrastructure disbursements, which included transfers to local government units and subsidies to government-owned and -controlled corporations, went up by 12% to P1.14 trillion as of end-September.

“This was equivalent to 6.1% of GDP (gross domestic product) vis-a-vis 5.9% outturn for the same period last year and the 5.6% full-year target this year,” it said.

Philip Arnold “Randy” P. Tuaño, dean of the Ateneo School of Government, said the increase in infrastructure spending is likely to be sustained in the short term.

“(The increase was) due to a significant balance from various budget sources that remain available for release, and the prioritization of large-scale transport projects such as the Metro Manila Subway,” Mr. Tuaño said in an e-mail over the weekend.

He also expects a surge in infrastructure spending given that the 2025 midterm election is five months away.

“It should first be noted that infrastructure spending year on year had increased, and this will further increase going into the 2025 national budget,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said in a Viber message. “This is the underlying reason for spending improvements this year.”

The government’s infrastructure program for this year is set at P1.472 trillion, equivalent to 5.6% of GDP.

Mr. Ridon urged infrastructure agencies to improve absorptive capacity “particularly as 2025 is an election year in which the law mandates a suspension of project implementation for a specific period of time.”

“The challenges are that the absorption and burn rate by our key agencies, especially in infrastructure and agriculture, have been quite low,” former National Economic and Development Authority Secretary Cielito F. Habito, said at a conference at the University of the Philippines School of Economics on Friday.

Mr. Habito raised that there have been “questionable priorities” on allocations and utilization in some sectors.

“We allocate a lot of budget but it turns out it can’t be spent within the period it was meant to be used,” he said in mixed English and Filipino.

“This is a very important issue in our fiscal policy in general. It’s not so much the fiscal policy, but the implementation of the fiscal policies in that sense.”

Mr. Habito also mentioned the propensity of DPWH to “reblock” roads, calling it a “seemingly misplaced allocation of the budgets.”

He also said the government needs more public-private partnership types of projects given the shortage of public funds.

Source: Business World

Infrastructure spending up 36.2% in April

Spending on infrastructure and other capital outlays picked up in April, the Department of Budget and Management (DBM) reported on Sunday, amid a push to increase expenditures to support economic growth.

The amount spent for infrastructure projects rose to P118.9 billion in April, 36.2 percent higher than the year-earlier P87.3 billion.

The improvement was said to be mainly due to strong spending by the Department of Public Works and Highways (DPWH) on road infrastructure projects and contractor mobilization fees.

The release of funds for the Department of Transportation's foreign-assisted projects and capital outlays under the Department of National Defense's (DND) revised Armed Forces of the Philippines modernization program also boosted infrastructure spending growth, the DBM said.

For the four-month period, infrastructure and capital outlays spending rose by 18.2 percent to P335.7 billion from P284.0 billion in January-April 2023.

The DBM attributed the increase to the implementation of various road infrastructure programs and defense modernization projects of the DPWH and DND, respectively.

Overall government spending was P494.5 billion in April, 32.2 percent higher than the P373.9 billion a year earlier.  

Year-to-date, meanwhile, it was up 16.2 percent to P1.7 trillion compared to P1.5 trillion in the same period in 2023.

"Robust disbursement performance is expected to be sustained in May with a strong two-digit growth rate vis-a-vis the 0.9 percent expansion recorded for the same month last year," the DBM said.

As of the end of April 2024, the remaining program balance from the P5.768-trillion obligation program was P809.2 billion, or about 14.0 percent of the total.

"Further releases are anticipated in the succeeding months as line agencies submit their special budget requests to implement their respective programs, activities, and projects," the DBM said.

"These will consequently accelerate the pace of government spending for the rest of the year."

Source: Manila Times