Infrastructure spending recovers slightly in May

MANILA, Philippines — The national government’s spending on infrastructure slightly recovered in May, posting almost six percent year-on-year growth due to the implementation of foreign-assisted projects and military modernization program, according to the Department of Budget and Management.

According to the DBM’s latest disbursement performance report, the government’s infrastructure and capital outlays climbed by 5.9 percent to P61.5 billion from P58.1 billion in the same month last year.

This showed a significant rebound from the 56.9 percent year-on-year contraction in infrastructure expenditures recorded in April.

“The increase is credited to disbursements for foreign-assisted infrastructure projects of the Department of Transportation (DOTr) and the Department of Public Works and Highways (DPWH), as well as for capital outlay (CO) projects under the Armed Forces of the Philippines (AFP) Modernization Program,” the DBM said.

Despite the increase last May, DBM data showed that infrastructure disbursements in the first five months reached only P267.9 billion, 4.6 percent below the P280.8 billion posted in the same period in 2018.

Still, the DBM noted that there was a slight improvement from the 7.3 percent drop recorded during the January to April period.

Public spending on infrastructure suffered in the first four months of the year due to the delay in the passage of the 2019 national budget.

Republic Act 11260 or the 2019 General Appropriations Act (GAA) was only signed by President Duterte last April 15, forcing the government to operate on a reenacted 2018 budget in the first quarter.

To make up for this, the Duterte Cabinet’s economic cluster formulated a spending catch-up plan for the rest of the year.

Data from the Bureau of the Treasury (BTr) showed that were was a slight improvement seen last May, with overall government disbursements increasing by 7.8 percent to reach P314.7 billion from P291.9 billion in the same month last year.

The BTr said this showed a recovery from the contraction in public spending in the previous month.

Year-to-date, however, cumulative expenditures in the first five months reached P1.31 trillion, still down by 0.8 percent from the P1.33 trillion spent in the same period last year. 

Moving forward, the DBM said it has fast tracked the processing for the release of second semester allocations to agencies.

“This will facilitate budget execution and help agencies implement their catch-up plans for their respective programs, activities, and projects (PAPs), and will hopefully accelerate the pace of government spending by the second semester of this year,” the DBM said.