Infrastructure spending rises 39% in September

INFRASTRUCTURE SPENDING rose by 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 expenditures for infrastructure and other capital outlays increased to P99.1 billion in September from P71.2 billion a year ago.

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

“The growth was largely due to the sizable disbursements of 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 Active Transport Bike Share System and Safe Pathways Program by the Department of Transportation (DoTr) also contributed to higher capital expenditures during the month, it added.

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

The DBM said that spending in January to September was due to the implementation of road infrastructure projects nationwide and capital outlay projects under the Revised Armed Forces of the Philippines Modernization Program of the Department of National Defense.

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

However, it attributed the lower spending against the program due to the unintended delays brought about by the election ban on public works during the earlier part of the year.

The modification of projects, unsettled right-of-way problems, intermittent weather conditions, delays in the submission of progress billings, and pending deliveries from suppliers and contractors also resulted in lower-than-programmed disbursements.

Infrastructure spending in the third quarter was higher by 16.3% to P249.9 billion from P214.9 billion in the similar period a year ago. It was also 8.84% above the P229.6-billion program.

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

“Furthermore, measures were already being undertaken to fast-track the implementation of said projects. For instance, the DoH (Department of Health) has been closely coordinating with their concerned operating units and providing them with assistance in resolving documentation requirements or issues. The review of current processes and existing systems is also ongoing with the end goal of improving fund utilization,” it added.

China Banking Corp. Chief Economist Domini S. Velasquez said the catch-up spending seen in September is much needed as the country still lags behind most of its neighbors in terms of infrastructure expenditures.

“Full utilization of the budget of line agencies is needed to ensure that the economy will be able to take full advantage of the budget. Historically, we have observed expenditures catching up in the fourth quarter as government agencies ramp up spending to close the year. Hopefully, the remaining programmed budget will be used on time,” 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 next year.

“Infrastructure spending remains a priority of the administration as a major economic driver, accounting for at least 5% of gross domestic product, more than twice 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 help attract more foreign investments into the country and also support initiatives to further develop agriculture and manufacturing, including farm-to-market roads and storage facilities.

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