February 4, 2023

Filipino Guardian

Sentinels of Filipino Free Press

Infrastructure spending surges 39% in September


By Luisa Maria Jacinta C. Jocson, reporter

INFRASTRUCTURE SPENDING rose 39.3% in September as the government completed more projects, the Department of Budget and Management (DBM) said.

In its National Government (NG) disbursement report, the DBM said spending on infrastructure and other capital spending rose to P99.1 billion in September from P71.2 billion a year earlier.

The September figure was also 34.6% higher than the P73.7 billion issued in August.

“The growth was largely due to significant disbursements from the Department of Public Works and Highways for completed and partially completed road infrastructure projects,” the DBM said in a press release.

Releases for the Department of Transportation’s (DoTr) Active Transport Bike Share System and Safe Pathways Program also contributed to higher capital spending during the month, it added.

In the nine months ended September, infrastructure spending rose 13.4% to P727.7 billion from P641.5 billion a year earlier, but 4.11% lower than the P758.9 billion Pest program for the period.

The DBM said the January-September spending was due to the nationwide implementation of road infrastructure projects and investment projects under the Defense Ministry’s revamped Armed Forces of the Philippines modernization program.

It also cited direct payments made by development partners to suppliers for the implementation of DoTr’s foreign-backed projects such as the Metro Manila Subway Project Phase 1, the Malolos-Clark Railway Project and the Maritime Safety Capability Project.

However, the lower spending was attributed to the program due to the unintended delays caused by the public works voting ban earlier in the year.

Changing projects, unresolved right-of-way issues, intermittent weather conditions, delays in filing progress statements, and pending deliveries from suppliers and contractors also resulted in lower than planned payouts.

Infrastructure spending rose 16.3% to P249.9 billion in the third quarter versus P214.9 billion in the same period a year ago. It was also 8.84% above the P229.6 billion program.

“Infrastructure and other capital spending have since picked up in the third quarter, exceeding the program for the period on catch-up spending,” the DBM said.

“Furthermore, measures have already been taken to speed up the implementation of these projects. For example, the DoH (Department of Health) has worked closely with the affected operating units and provided them with assistance in resolving documentation requirements or issues. The review of the current processes and systems in place is also ongoing, with the ultimate goal of improving the use of funds,” she added.

China Banking Corp. chief economist Domini S. Velasquez said the catch-up spending recorded in September was badly needed as the country still lags behind most of its neighbors in terms of infrastructure spending.

“Fully exhausting the budget of the liner agencies is necessary for the economy to fully utilize the budget. In the past, we’ve seen spending catch up in the fourth quarter as government agencies ramp up year-end spending. Hopefully the remaining programmed budget will be used in a timely manner,” Ms. Velasquez said in a Viber message.

Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said infrastructure spending will likely remain a “bright spot” for the economy over the next year.

“Infrastructure spending remains a government priority as a key economic driver, accounting for at least 5% of gross domestic product, more than double the 2% over the past 20-30 years,” he said in a Viber message.

Mr Ricafort added that increased spending on infrastructure is needed to attract more foreign investment to the country and also to support initiatives to advance agriculture and manufacturing, including farm-to-market roads and storage facilities.