Government ramps up infrastructure spending to P87 Billion in April

MANILA, Philippines — The government ramped up its infrastructure spending to P87 billion in April, mainly to finance road and rail 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 jumped by nearly 37 percent to P87.3 billion in April from P63.8 billion in the same period last year.

The DBM said the substantial increase was due to the billings for advance payments or mobilization costs for the implementation of ongoing projects of the Department of Public Works and Highways.

Likewise, the constructive receipts of cash payments during the month were P4.3 billion higher year-on-year, mainly on account of the Malolos-Clark Railway Project of the Department of Transportation.

For the four-month period, infrastructure spending picked up by 15 percent to P284 billion from P247 billion.

The DBM said this was largely due to the accelerated implementation of various infrastructure projects of the DPWH nationwide, and the direct payments made by development partners for the implementation of foreign-assisted rail projects of the DOTr.

Meanwhile, overall government spending for April reached P373.9 billion, up nine percent from the P343 billion a year ago.

Apart from infrastructure, the government also recorded higher maintenance and other operating expenses to P53.6 billion due to assistance and subsidies for the education and health sectors.

An improvement in government spending was similarly noted in subsidy support to government corporations which went up to P75.1 billion largely for irrigation and the one-time rice assistance to state workers this year.

Interest payments also increased by 24 percent to P46.3 billion due to coupon payments for global bonds, as well as the impact of higher exchange rates.

Personnel services expenditures also barely moved at P95.5 billion, inching up by just less than two percent.

On the other hand, combined allotment and capital transfers to local government units fell by 13 percent to P74.1 billion on lower tax allotments due to the Mandanas Ruling.

The tax revenue base, from which the tax allotment shares of LGUs this year is determined, was the actual tax collections in 2020 –  the height of the pandemic.

Tax expenditures also went down to P3.2 billion due to lower recorded documentary stamp taxes on government securities.

As of end-April, the remaining program balance amounts to P749.8 billion or almost 15 percent of the record-high P5.268 trillion 2023 budget.

While the growth of disbursements this year is expected to remain moderate due to lower share of LGUs, the DBM said spending may accelerate in the second half following releases for the health and energy sectors.

“Payment for completed and partially completed infrastructure projects of the DPWH and rail transport foreign-assisted projects of the DOTr, as well as the release of the targeted cash transfer and 2023 mid-year bonus of qualified government employees will buoy disbursements,” DBM said.

The government has set a spending target equivalent to 21.3 percent of gross domestic product this year, while overall infrastructure disbursements will be equivalent to 5.3 percent of GDP.