Public infra spending up 36%

MANILA, Philippines - Public infrastructure spending grew 35.6 percent in the first five months of the year, reinforcing the government’s commitment for sustained and inclusive economic growth.

The Department of Budget and Management reported that from January to May, infrastructure spending continued its upward trend, rising to P106.4 billion from only P77.1 billion in the same period in 2012.

This brings total disbursements to P751.2 billion as of May, up 12.4 percent from the previous year. Expenditures for this period also exceeded the 8.1-percent growth average for January-May disbursements since 2005.

“The implementation of program budgeting helped bring a more deliberate and strategic approach to spending, so that expenditures are closely aligned with President Aquino’s campaign for long-term, inclusive growth,” Budget and Management Secretary Florencio Abad said.

According to the World Bank, the Philippines needs to jack up its infrastructure spending  to provide that “fiscal spark that is still missing in the country’s growth path” and to attract more foreign direct investments into the country.

Maintenance and other operating expenditures went up by 25.1 percent to P120.2 billion during the review period, mostly going to social welfare programs under the Department of Social Welfare and Development (DSWD), the Branding Campaign Program under the Department of Tourism (DOT), as well as expenses made to cover the 2013 National and Local Elections.

Abad said while disbursements under net lending fell, the decrease showed that the government was no longer covering for losses incurred by government-owned or controlled corporations.

He said the country’s spending performance to date will act as a solid base for growth in the second semester of the year, as the government continues to ramp up spending.

“We are working actively with our Account Management Teams in key implementing agencies to sustain and further improve the pace of disbursements, as well as to eliminate expenditure bottlenecks that might prevent our agencies from making the most of their fund releases,” Abad said.

Capital spending increased by 26.8 percent to P104.6 billion. More than half of the amount was used to cover the P60 billion in payments made by the DPWH to suppliers/contractors for various public infrastructure projects.

Other contributors to the increase are disbursements made for projects under the Department of Transportation and Communication as well as the construction of farm-to-market roads under the Department of Agriculture.

Personnel Services amounted to P237.7 billion, up 12.2 percent year on year largely due to the annualized salary adjustments as a result of the implementation of the Salary Standardization Law III, as well as claims for retirement gratuity and terminal leave benefits.