Infrastructure funds contract due to other expenses of government

MANILA, Philippines - Rising debt service expense and government payroll have led to the contraction of proposed infrastructure funds for next year, Budget Secretary Rolando Andaya Jr. said yesterday.

During a budget hearing at the House of Representatives last week, lawmakers raised concerns on the smaller budget for capital outlay.

Quirino Rep. Junie Cua raised the question on why the proposed P1.541-trillion budget for 2010 reflected a reduction in capital outlay to P183 billion from P233 billion in 2009 or a drop of 21.5 percent.

Andaya said “personal services,” the collective nomenclature for pay, pension and allowances in the bureaucracy, will reach P494 billion in 2010 from P429 billion this year while interest payments on government debt will hit P340.8 billion, up from P302.6 billion for last year.

Amounting to P834.8 billion, the two items will account for 54 percent of the P1.514-trillion budget for 2010. 

Andaya said the increases in the allocations for the two items could finance the construction of roads and classrooms but noted that there was a need to service debts and provide for personal services.

“The P103.2-billion increase in the allocations for the two items if applied to infrastructure could fund many roads and classrooms,” Andaya said.

Nevertheless, Andaya said the public sector infrastructure budget, which is a component of total capital outlays, will hit P210.7 billion next year and will allow the Arroyo administration to complete projects it had started.

He said this does not include investments made by private groups, with some cloaked with government guarantees, on roads and other transport infrastructure.

The Budget chief said the Arroyo administration’s infrastructure record “should be viewed in its entirety, not just on the final lap.”

“This government has constructed 95,337 new classrooms, and built or improved 47,409 kilometers of roads. By whatever yardstick, that is an excellent record,“ he noted.