Infrastructure spending down 16% from January to September

MANILA, Philippines — Government spending on infrastructure slowed down by 16.5 percent in the first nine months as the coronavirus pandemic caused delays in construction activities and discontinuance of projects, the Department of Budget and Management (DBM) reported yesterday.

According to the latest data from the DBM, infrastructure and other capital outlays amounted to P451.5 billion from January to September, 16.5 percent lower than the P540.7 billion recorded in the same period last year.

This was, however, 4.8 percent higher than the P430.9 billion infrastructure spending program for the nine-month period.

For September alone, infrastructure expenditures plunged by nearly 40 percent to P56.9 billion from P94.7 billion a year ago.

According to the DBM, the drop in capital outlays could be attributed to the quarantine restrictions caused by the coronavirus pandemic, which led to the delay in construction activities earlier this year.

The delay later on prompted implementing agencies to discontinue some projects, which are unlikely to be started or completed within the year.

“It is noted that infrastructure spending is expected to be lower with the discontinuance of some capital outlay projects which are unlikely to be completed nor implemented this year due to the pandemic, as well as the delays in construction activities in the earlier part of the year,” the DBM said.

“This compares to the huge infrastructure disbursements in the previous year with the catch-up spending plan of the Department of Public Works and Highways,” it said.

Including equities and capital transfer to local government units, total capital outlays in the first nine months declined by 10.5 percent to P586.7 billion from P655.4 billion in the same period in 2019.

This was also down by 3.8 percent from the target of P609.9 billion as both equity and capital transfers were behind their respective programs.

Despite the decline in infrastructure expenditures, the national government’s overall spending performance from January to September  rose by 15.1 percent to P3.02 trillion from P2.63 trillion last year. However, this was still 7.5 percent below the P3.27 trillion program.

The DBM said infrastructure spending for the last quarter of the year is expected to be “relatively higher” compared to the earlier part of 2020, as the bulk of the progress billings from contractors and suppliers are submitted during this period.

Moreover, the DBM said the DPWH continues to accelerate disbursements, especially for projects completed or to be completed within the year.

In a text message to The STAR, Budget Secretary Wendel Avisado said the budget department had also completed the issuance of Special Allotment Release Order (SARO) for all small infrastructure projects this year.

“For bigger projects, we just received the request for MYCA (multi-year contractual authority) issuance from the DPWH and as of (Oct. 29) we have already released all the MYCA for all projects in Region 1,” Avisado said.

The budget chief said the timely release of allotments would enable agencies to implement their projects at the soonest time.