Infrastructure spending accelerates to P1 trillion in 2022

MANILA, Philippines — The government increased its infrastructure spending last year, hitting P1 trillion and effectively surpassing its programmed allocation on the back of faster disbursements for major transport and road projects, the Department of Budget and Management (DBM) said.

Based on the latest national government disbursement performance report of the DBM, state infrastructure expenditure and other capital outlays picked up by 13.4 percent to reach P1.02 trillion last year compared to the P895.1 billion spent in 2021.

Infrastructure expenditures accounted for about 20 percent of the record P5.16 trillion government disbursements last year.

The 2022 infrastructure spending surpassed the P979.3 billion program by P36 billion or 3.7 percent due to the faster disbursements of the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr).

Last year’s infrastructure spending was equivalent to 5.8 percent of the country’s gross domestic product.

This was the same level in 2021, but was above the 5.5 percent target set by the government for 2022.

The DBM said the expansion in infrastructure and other capital outlays was due to the higher spending of the DPWH amid fast-tracked implementation of carry-over projects and payment of accounts payables.

The DPWH also adopted streamlined policies for project implementation and processing of documents to ensure that bottlenecks are resolved and spending targets are achieved.

Likewise, the DBM attributed the higher infrastructure spending to the direct payments made by development partners for foreign-assisted rail transport projects of the DOTr.

These include the Malolos-Clark Railway, Metro Manila Subway, and the North-South Commuter Railway projects.

Capital expenditures related to various projects for the Armed Forces of the Philippines Modernization Program of the Department of National Defense also fueled the increase.

For this year, total infrastructure disbursements are planned to be at least five percent of GDP, in line with the five to six percent target under the medium-term fiscal framework of the Marcos administration.

Budget chief Amenah Pangandaman said the administration would focus on physical, social, digital, and green infrastructure investments, as well as the utilization of public-private partnerships to bridge the country’s infrastructure gap.

This year, some P479 billion is earmarked for road projects while P283 billion is allotted for flood control infrastructures.

The government will also spend P164 billion for local infrastructure development, P48 billion for buildings, and P40 billion for railways.

On the other hand, overall government spending in 2022 reached P5.16 trillion, up 10.4 percent on a yearly basis.

Broken down, personnel services expenditures went up by seven percent to P1.38 trillion following the implementation of the third tranche of the salary standardization law, higher pension and retirement claims of military and uniformed personnel.

It also covered allowances to healthcare workers, as well as additional filled positions.

Combined allotment and capital transfers to local government units rose 24 percent to P1.1 trillion on higher tax allotments due to the Mandanas Ruling.

Interest payments also increased by 17 percent to P502.9 billion due to coupon repayment of local and global bonds, new loan availment, foreign exchange fluctuations, and higher interest rates.