Infra spending down 5.7% in March

MANILA, Philippines — Government spending on infrastructure declined by 5.7 percent in March as some line agencies were unable to implement new projects under the reenacted budget, according to the Department of Budget and Management.

According to the latest disbursement report of the DBM, infrastructure and capital outlays amounted to P59.7 billion in March, 5.7 percent lower than the P63.4 billion in the same month last year.

The DBM attributed this to the decline in the infrastructure outlays of some agencies, including the Department of Interior and Local Government (DILG), and the Department of Education (DepEd), which were unable to implement some projects due to the delay in the 2019 budget.

“Despite the growth in the Department of Public Works and Highways’ (DPWH) disbursements for payment of prior years’ accounts payables for completed roads, bridges and school buildings (P11.7 billion or 42.7 percent year-on-year, a significant decline in capital expenditures was recorded in some agencies such as the DILG and DepEd,” the DBM said.  

“The said agencies were unable to implement new capital outlay projects, such as the construction of police stations, purchase of equipment under the Capability Enhancement Program of DILG, and repair and rehabilitation of school buildings due to limitations in release of funds under the reenacted budget,” it said.

Despite this, the DBM said disbursements for infrastructure in the first three months grew by 13.4 percent to P178.1 billion from P157.1 billion in the same quarter in 2018, due to the payment of accounts payables from prior years.

The Congress’ deadlock over the 2019 appropriations delayed the passage of the General Appropriations Act (GAA), which forced the government to operate on a reenacted 2018 budget in the first quarter.

As a result, the national government’s disbursements for March dropped by 8.2 percent to P287.3 billion from P313.1 billion in the same month last year.

For the first quarter, expenditures reached P778 billion, 0.8 percent up from the P772 billion recorded in the same period in 2018.  

Economic managers estimate that underspending reached P1 billion a day, or about P90 billion in the first quarter, dragging economic growth to a four-year low of 5.6 percent.

After months of delay, President Duterte was finally able to sign the 2019 General Appropriations Act last April 15, while vetoing P95.4 billion in allocations for the DPWH.  

As a result, the DBM said the 2019 budget was reduced to P3.661 trillion, which is still higher by 10.1 percent when compared to the cash-based equivalent of the 2018 budget of P3.326 trillion.

“With the signing of the 2019 budget by the President last April 15, government spending is expected to normalize in the coming months, especially after the election ban,” the DBM said.