Government infrastructure spending overshoots program

9-month outlay hits P858 billion

MANILA, Philippines — The government ramped up infrastructure spending to P858 billion in the first nine months the year, largely to finance rail 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 jumped by 19 percent to P857.6 billion from January to September.

The figure is also 15.8 percent higher than the P740.7 billion infrastructure spending program set by the Cabinet-level Development Budget Coordination Committee for the end-September period.

The DBM attributed the increase to the acceleration of implementation of various infrastructure projects of the Department of Public Works and Highways nationwide.

The constructive receipt of cash payments of the Department of Transportation for their foreign-assisted rail transport projects also contributed to the increased spending.

Including the infrastructure components of transfers to local government units and subsidies and equity to state-owned firms, total infrastructure disbursements reached P1.02 trillion, marking a 13 percent increase and accounting for 5.9 percent of the economy.

Meanwhile, overall government spending for the nine-month period increased by four percent to P3.82 trillion but was 1.1 percent below the programmed P3.86 trillion expenditure.

Apart from infrastructure, only tax expenditure managed to temper the overall underspending after it exceeded the program by almost 90 percent to P20.3 billion.

The rest of the government expenditure items fell short of the program during the nine-month period.

Personnel services expenditures at P1 trillion were slightly below the program by three percent due to unfilled positions in various agencies, particularly in the education sector, as well as balances in lump sum funds.

The government also recorded lower maintenance and other operating expenses to P632.8 billion due to ongoing implementation of programs of the Department of Social Welfare and Development and Department of Tourism.

A decrease in government spending was similarly noted in subsidy support to government corporations, which was 26 percent below the program at P137.1 billion.

This is due to the pending releases to the Philippine Health Insurance Corp. and the National Irrigation Authority.

As of end-September, the remaining program balance amounted to P149.9 billion or 2.8 percent of the record P5.268 trillion budget for 2023.

The DBM said that the government is confident the disbursement program for the year will be met, given the expected quicker cash allocation utilization in the last quarter.

“Agencies generally fast track obligations and payments before the closing of books and the lapsing of NCAs at the end of the year,” the DBM said.

The agency added that other spending items that would support disbursements for the remainder of the year include social protection payouts, educational grants, financial assistance for farmers, infrastructure, irrigation subsidies, and year-end bonuses and cash gifts.