Gov’t spending on infrastructure falls by P9B in April

MANILA, Philippines – Government spending on infrastructure fell 21.2% in April, as its big-ticket projects have yet to break ground.

Data released by the Department of Budget and Management (DBM) on Friday, May 26, showed that infrastructure and other capital expenditures amounted to P33.5 billion for April 2017, P9 billion lower than the P42.5 billion recorded in the same month a year ago.

“Spending for the month was lower year-on-year primarily due to combined effects of election-related and one-off big-ticket capital expenditures,” the DBM said in its assessment report of disbursement performance.

In particular, the DBM pointed to the lack of large capital expenditures of the Armed Forces of the Philippines Modernization Program (AFPMP) such as the purchase of FA-50 aircraft and anti-submarine helicopters which contributed to around P3.7 billion in disbursements last year.

“For this year, similar AFPMP projects are programmed in the 2nd semester as the approval and procurement of the same are still ongoing,” the DBM said.

The DBM also noted that disbursements of the Department of Public Works and Highways (DPWH) were lower year-on-year.

“Implementation of projects under its road network services which include road widening, repair and rehabilitation, and flood control projects, among others, are still underway,” said the DBM.

Maintenance spending was also down by 27.5% to P25.1 billion, compared to the P34.6 billion a year ago which the DBM attributed mainly “to the absence of election-related expenditures of the Commission on Elections (Comelec) and the still ongoing procurement activities for some of the banner programs of the government.”

Total spending for the month of April, meanwhile, reached P183.1 billion, down by 4.5% from the P191.6 billion recorded in the same month last year.

But government spending for 2017, so far, remains 2.0% higher than 2016 at P798.4 billion.

“Based on historical trends, spending grows faster during the first two quarters of a presidential election year since implementation and completion of various priority programs and projects of the outgoing administration are accelerated ahead of the transition,” the DBM said.

“Growth then subsides during the first 6 months of the new administration as it begins to shape its expenditure policies and continues up to the early part of the following year as the effect of election spending wanes down,” it added.

The country’s GDP slowed to 6.4% in the 1st quarter of 2017 due in part to the lack of the expected boost from big-ticket infrastructure projects.

The government also plans to rely less on the public-private partnership (PPP) model and finance more big-ticket infrastructure projects through Official Development Assistance (ODA) in a bid to speed up implementation.

The latest indication of this shift includes the removal of 5 regional airports from the PPP pipeline. – Rappler.com