Infra spending up 38% in 8 mos

MANILA, Philippines - Government spending on infrastructure continued its upward trajectory, rising 38.5 percent in the first eight months of the year in line with Aquino administration’s efforts to sustain economic growth.

The Department of Budget and Management reported yesterday that expenditures for infrastructure and capital outlay increased to   P169.6 billion as of August compared with only P122.4 billion in the same period a year ago, majority of which going to irrigation projects across the country.

Subsidies to government-owned corporations, which posted the largest year-on-year increase at 119.6 percent, also contributed to the hike in government expenditures. This is due to the releases for the 2013 National Health Insurance Program (NHIP) premium subsidy, the National Electrification Administration (NEA)-implemented Sitio Electrification Program and National Housing Authority’s 2011 and 2012 Resettlement Program and AFP/PNP Housing Project.

This – along with improved year-on-year levels for other government expenditures – raised total disbursements as of August to P1.22 trillion or an increase of  12.6-percent year-on-year.  This was higher than the average growth rate shown in last eight years for the same period.

“Consistent improvements in our infrastructure and capital outlay disbursements are proof of the Aquino government’s commitment to further expand the economy through strategic infrastructure investments,” Budget Secretary Florencio “Butch” Abad said.

For this year, the government expects to spend P299.4 billion for infra-related projects, equivalent to 2.5 percent of gross domestic product or GDP.

Abad said the Aquino administration is looking at further accelerating state spending in line with its goal to raise the budget earmarked for infrastructure to five percent of the expected GDP by 2016 to be at par with other Southeast Asian countries.

Both the World Bank and the Asian Development Bank said the Philippines needs to ramp up spending for infrastructure if it wants to attract more foreign investments and compete head on with its Asean neighbors.

“Government expenditures are expected to climb further in the remaining months of the year, thanks to several budget reforms that helped make disbursements more efficient. To date, we have already released 91 percent of the P2.006-trillion obligation program for the year. These releases will support the quick implementation of key programs and projects designed to generate rapid and sustainable economic growth,” Abad said.