Infrastructure spending declines in Q1

MANILA, Philippines — Public spending on infrastructure declined in the first quarter as the implementation of community quarantine caused delays in the construction of projects, according to the Department of Budget and Management (DBM).

Latest data from the DBM showed that infrastructure expenditures amounted to P156.1 billion in the first three months, 12.4 percent lower than the P178.1 billion in the same period last year.

This was likewise 18.3 percent below the national government’s infrastructure spending target of P191.1 billion for the period.

The DBM said the decline was caused by higher base effects as well as the declaration of enhanced community quarantine in Luzon to limit the spread of the coronavirus disease 2019 or COVID-19.

“Infrastructure and other capital outlays were down to P156.1 billion or P22.1 billion lower year-on-year, which is mainly attributed to the base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior years’ accounts payables and the temporary suspension of construction activities due to the enhanced community quarantine,” the DBM said.

Including equity and capital transfer to local government units, total capital outlays in the first quarter reached P197 billion, still 7.3 percent down from last year’s level of P212.6 billion, and 17.1 percent short of the P237.7 billion program.

Meanwhile, the DBM said infrastructure spending for the March alone inched up by 4.1 percent to P62.2 billion from P59.7 billion in the same month last year.

The DBM said the increase was driven by the right-of-way acquisitions for the Light Rail Transit Cavite Extension and the Metro Manila Subway Project, as well as higher payments to suppliers of foreign-assisted projects.

“The increase in capital expenditures was dampened by lower DPWH (Department of Public Works and Highways) disbursements, following the unintended delays in the implementation of some infrastructure projects due to restrictions during the Luzon-wide enhanced community quarantine,” the DBM said.

Despite the decline in infrastructure spending, the national government’s total disbursements in the first quarter rose by 9.2 percent to P849.2 billion from P778 billion in the same period last year.

This was, however, 14.5 percent down the target of P993 billion for the period.

The DBM said the lower-than-programmed spending performance in the first quarter may be offset in the second quarter, with the realignment of the budget and the implementation of other measures to generate savings to finance COVID-19 response. 

In particular, the agency said disbursements in the second quarter will be driven by the Social Amelioration Program, Small Business Wage Subsidy Program, Bayanihan Grant to Provinces, Cities and Municipalities, and additional funding for the various health programs of the Department of Health.