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  • Writer's pictureZiggurat Realestatecorp

Infrastructure Spending Exceeds Target

Government spending on infrastructure from January to September hit P641.5 billion, exceeding the nine-month target by 8.9 percent, due to the construction of more airports, railways and roads.

The latest Department of Budget and Management (DBM) data on Wednesday showed that end-September expenditures on infrastructure and other capital outlays surpassed the P589.3-billion program and jumped 42.1 percent from P451.5 billion a year ago.

In a report, the DBM noted that the P190-billion increase in public infrastructure spending contributed more than half of the P353.6-billion rise in the national government’s total disbursements in the nine months to September.

“The implementation of various road infrastructure projects of the DPWH (Department of Public Works and Highways) nationwide, aviation and rail transport foreign-assisted projects of the DOTr (Department of Transportation) such as the Tacloban, Kalibo and Bukidnon airport projects and the Metro Manila subway project phase one, and projects under the DND’s (Department of National Defense) revised Armed Forces of the Philippines modernization program” boosted the end-September spending, the DBM said.

The DBM also attributed the above-target nine-month infrastructure expenditures to the settlement of accounts payables and faster implementation of infrastructure activities of the DPWH amid the looser community quarantine restrictions.

In the third quarter, infrastructure spending amounted to P214.9 billion, up 39.9 percent from P153.5 billion last year and 26.6 percent more than the P169.7-billion goal.

In September alone, the amount spent on infrastructure grew by a fourth to P71.2 billion from P56.9 billion a year ago mainly on the back of the “implementation of DPWH projects nationwide, such as the construction, repair, rehabilitation and improvement of access, bypass, and diversion roads, bridges, flood mitigation structures and drainage systems, and the construction of multipurpose building; and projects under the revised AFP modernization program of the DND,” the DBM said.

Lower subsidy releases

If the infrastructure components of equity and subsidies injected into state-run corporations as well as transfers to local government units were included, overall nine-month infrastructure disbursements would amount to P807.5 billion, up 35.7 percent from P595 billion a year ago and 1.2 percent larger than the P797.5-billion program.

However, the DBM said the growth of total infrastructure disbursements was tempered by the lower-than-programmed subsidy releases to the Bases Conversion and Development Authority and the National Irrigation Administration which were based on their special budget requests.

For the rest of the year, the DBM said the national government’s overall spending would continue to be driven by infrastructure and other capital outlays based on the submission of progress billings for completed/partially completed projects that were started in the earlier part of the year, and the reopening of classes that would jack up expenditures in the education sector.

The Cabinet-level Development Budget Coordination Committee had planned to spend P1.02 trillion on infrastructure development this year, equivalent to 5.1 percent of gross domestic product.

In a report this month, the UK-based think tank Oxford Economics said the Philippines’ ambitious “Build, Build, Build” program would provide vital support to the domestic construction sector.


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