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Manila Bulletin devider Business devider Low base drives infra spending in 2021—DBM

Low base drives infra spending in 2021—DBM

Published Mar 27, 2022 08:30 pm

Infrastructure spending accelerated last year, but it was mainly driven by low base effect of the Covid-19 pandemic in 2020, the Department of Budget and Management (DBM) reported.

Public spending on infrastructure and other capital outlays rose 31 percent to P895.1 billion in 2021 from P681.5 billion in the previous year. The amount also exceeded the P761.2 billion program for the year.

DBM noted that the significant expansion was due to the combined effects of lower base in 2020 as well as implementation of various infrastructure projects of the Department of Public Works and Highways (DPWH) nationwide.

To recall, some capital outlay projects in 2020 was discontinued or can no longer be implemented or completed due to the pandemic pursuant to the Bayanihan laws, the budget department said.

However, DBM added that other capital outlays such as the Armed Forces of the Philippines (AFP) modernization program and health facilities enhancement program also contributed to higher infrastructure spending.

When combined with the infrastructure components of subsidy, equity releases to state-owned firms, and transfers to local government units, the total infrastructure disbursements reached P1.12 trillion in 2021, equivalent to 5.8 percent of the economy.

“This is 29.2 percent higher than 2020’s P869.9 billion (4.8 percent of gross domestic product), and 10.2 percent more than the P1,019.1 billion program (5.6 percent of GDP) for 2021,” DBM said.

On surpassing last year’s infrastructure spending program, DBM explained that the 17.6 percent above target disbursement was due to “accelerated implementation of infrastructure projects of the DPWH amid the relatively looser community quarantine restrictions in 2021.”

In December alone, infrastructure and other capital outlays grew 1.5 percent to P134.7 billion from P132.7 billion a year earlier due to higher releases for the AFP modernization program and the construction of Smart Campuses in Marawi.

“The growth of infrastructure and other capital expenditures in December 2021 was partly trimmed down by the timing of direct payments made by development partners for the foreign-assisted projects of the Department of Transportation (DOTr),” DBM said.

In December 2020, some P12.6 billion in direct payments was made for various rail transport projects of the DOTr. This is in contrast to the P2.5 billion in December 2021.

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