Infra spending drops in October

Published December 27, 2019, 12:00 AM

by manilabulletin_admin


Infrastructure spending of the national government declined last October on the back of the base effects from the abnormally high disbursements a year ago and checks that have not yet been cashed by the Department of Public Works and Highways (DPWH).

Data from the Department of Budget and Management (DBM) showed yesterday that infrastructure and other capital outlays dropped 13 percent to ₱82.2 billion in October from ₱94.4 billion in the same month last year.

DBM explained the double-digit decline was “mainly from the base effects of the 83.4 percent growth recorded in the previous year and the accumulation of some ₱12.7-billion outstanding checks in the DPWH.”

“The said amount once encashed by suppliers and contractors would increase infrastructure disbursements in the remaining months,” the department added.

In the first 10 months of the year, total infrastructure expenditures reached ₱628.5 billion, also down by 5.5 percent compared with ₱665.1 billion in the same period last year.

The contraction in infrastructure spending in January to October was mainly due to the delay of the passage of the 2019 national budget and election ban.

To recall, a dispute between the Senate and the House of Representatives over alleged budget insertions resulted in the four-and-a-half-month delay in the passage of the this year’s general appropriations act.

Because of the delayed budget, the Duterte administration was forced to run on 2018’s budget, limiting it to spend for items detailed in the 2018 appropriations and not on programs and projects supposed to be implemented this year.

On top of the budget impasse, government spending was also banned from March to May because of the May 13 midterm elections.

The end-October infrastructure disbursement was only equivalent to 73 percent of the 2019 full-year program of ₱859.5 billion.

Meanwhile, the national government’s disbursements rose by 1.4 percent in October to ₱310.8 billion from ₱306 billion in the previous year.

The slight increase was owing to higher current operating expenditures on personal services, subsidies to government-owned corporations, and transfers to local government units.

At end-October, total expenditures rose 5.1 percent to ₱2.938 billion from ₱2.796 billion in the same period last year.

“Line agencies have two more months to request for the release and to obligate said funds before the end of the fiscal year,” DBM said.

“This could strongly drive spending as line agencies also try to complete their programs and projects and settle payables before the year ends,” it added.