Government infrastructure spending rises 31% to P895 billion in 2021

MANILA, Philippines — The government resumed the faster pace of its infrastructure expenses last year with nearly P900 billion spent on public works, made possible by the easing of quarantine restrictions nationwide.

According to the Department of Budget and Management (DBM), infrastructure spending spiked by 31 percent to P895.1 billion in 2021 from P681.5 billion in 2020.

The DBM said infrastructure disbursements during the period exceeded what the government allocated, reaching P761.2 billion.

The DBM attributed the recovery in infrastructure spending to the lower base in 2020 due to the cancellation of some projects. The government had to postpone public works at the onset of the pandemic to pour its resources on social interventions.

Similarly, the DBM said the Department of Public Works and Highways carried out multiple road network, flood control and building construction projects throughout 2021. The efforts came side by side with the completion of foreign-funded works on aviation and railways.

“The capital outlays of other departments, such as the Revised Armed Forces of the Philippines Modernization Program of the DND [Department of National Defense] and the Health Facilities Enhancement Program of the Department of Health also contributed to the higher infrastructure spending,” the DBM said.

Further, the DBM said when the item is combined with infrastructure components of subsidy and equity releases to state-run firms and issuances to local governments, infrastructure spending would jump to  P1.12 trillion.

At this rate, infrastructure disbursements contributed at least 5.8 percent to gross domestic product (GDP) last year.

Moving forward, the DBM expects infrastructure spending to resume its rebound this year in spite of the election ban until the May polls. The government filed for the exemption of 18 projects from the spending prohibition.

The DBM estimates that some P500 billion worth of projects were covered in the exemption like the Cebu-Mactan Bridge and Coastal Road Construction, Ambal-Simuay River and Rio Grande de Mindanao River Flood Control and the Pasig-Marikina River and Manggahan Floodway and Bridges Construction.

The DBM added that the government filed for an exemption from the election ban in completing its relief and rehabilitation efforts in areas hit by Typhoon Odette in December 2021.