Budget cut forces DPWH to implement cost-saving measures

Published January 18, 2022, 3:02 PM

by Waylon Galvez

Department of Public Works and Highways (DPWH) Secretary Roger G. Mercado has placed the overall supervision and control of the department’s planning service under the control of his office as a cost-saving measures following a huge budget cut it suffered from the 2022 General Appropriations Act (GAA).

According to Mercado, the budget cut affected the fund for non-infrastructure and routine maintenance of national roads and bridges, as well as road safety facilities of the department.

Under the Department Order 2, Mercado relieved DPWH Engineer Maria Catalina E. Cabral from her assignment as Undersecretary for Planning Service, which is responsible for the formulation of the Annual Infrastructure Program for presentation to and approval of Congress.

Cabral, however, retains her function as Undersecretary Public-Private Partnership Service (PPPS).

The big cut in the budget of DPWH infrastructure comes in the core services of the 2022 National Expenditure Program (NEP), which was moved and channeled to the Convergence and Special Support Program (CSSP), which received ₱352.8 billion appropriations – or an increase of ₱146.3 Billion in 2022 NEP for a whopping 46 percent of the total DPWH ₱767 Billion infrastructure budget in the 2022 national budget.

The CSSP consists mostly of Local Projects to be transferred to the Local Government Units in the light of the LGU Code and Supreme Court ruling on the Mandanas case.

The budget for the asset preservation of national roads was also more than doubled to ₱117.5 Billion in the 2022 GAA compared with the original submitted NEP of ₱63.3 Billion.

Faced with great challenges arising from unbalanced allocation to prioritize the funding of local projects are the implementation of President Duterte’s flagship infrastructure projects under the ‘Build Build Build’ program – 40 of which are under the Official Development Assistance and four are purely locally funded projects.

From the 2022 NEP of ₱55.231 billion for flagship projects, the budget dropped to just ₱8.941 billion in the 2022 GAA compared to the higher share of ₱15.43 billion in GAA for Local Programs.

The budget for flagship projects is not enough to sustain the implementation of projects for the year, and it will have impact on additional funds for late payments and price escalations and incur commitment fees and other charges.

Projects with completed detailed engineering design and ready for bidding will forgo procurement due to limited resources to pay not even the claims for advance payment.

Prior to the passage of the budget in 2019, several DPWH staff in the Planning Service were implicated over alleged illegal insertion of projects in the budget that forced Congress to conduct an investigation and eventually delayed deliberations on the 2019 budget, prompting government to work on a reenacted 2018 budget until April 2019.

Under the National Budget Call for 2023 thru National Budget Memorandum Circular No. 142 dated January 12, 2022, national government agencies like the DPWH shall now focus on national programs and should refrain from duplicating the direct delivery of devolved functions and services with the LGUs.