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Infrastructure outlay buoyed by rush in building quarantine sites
A prolonged weakness in infrastructure growth could become a problem for President Rodrigo Duterte, who is banking on higher infrastructure spending to generate jobs and help power the economy from a coronavirus-led slump.
Boy Santos

Infrastructure outlay buoyed by rush in building quarantine sites

Ian Nicolas Cigaral (Philstar.com) - June 17, 2020 - 6:20pm

MANILA, Philippines — A scramble to construct isolation hubs and purchase medical equipment offset a massive disruption in building activities and helped propel government infrastructure spending in the middle of lockdowns in April.

Capital outlays rose 37.5% year-on-year to P52.1 billion that month, figures released by the budget department on Wednesday showed. Of that figure, P40.1 billion, up 41.9% annually, went directly to infrastructure constructed by the national government.

The balance of P12 billion, down a little more than a quarter year-on-year, were funneled to cities and municipalities to fund capital outlay. 

The sustained growth in infrastructure spending puts the Duterte government in strong footing ahead of its plan to ramp up building as movement restrictions were eased starting June 1. As it is, observers expected capital outlays to have slumped during the lockdowns when both public and private construction activities were halted.

“It is has been clear that our government economic managers will prioritize the continuation of infrastructure development, as earlier prioritized during pre-COVID times,” Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, said in a text message.

“I am not expecting any deviation from this plan,” Asuncion added.    

Which projects were exactly funded by the disbursements in April were not specifically identified in the report. What was in the DBM report, however, was the justification that the “construction of COVID-19 quarantine facilities and purchase of medical equipment,” both qualified as big-ticket undertaking, buoyed infrastructure spending that month.

Separate data from the National Task Force against the coronavirus showed that as of June 17, the national government alone constructed 4,402 quarantine sites for suspected and confirmed cases of the virus. Cities and municipalities also built their own isolation centers.

On top of that, the government has also set to buy more personal protective equipment (PPE) for health workers at the frontlines of the pandemic. As of June 9, 1.23 million PPEs had been distributed nationwide, data showed.

Bright outlook

With the April uptick in infrastructure spending, capital outlays so far amounted to P249.2 billion in the first four months of the year, down only slightly from P250.5 billion same period a year ago.

As quarantine controls beginning to relax, the budget agency is optimistic infrastructure spending will soon swing to the positive level, a welcome development for a government that is banking on a massive build-up to revive an economy that shrank 0.2% in the first quarter.

“This should facilitate the resumption of construction activities of the Department of Public Works and Highways and the Department of Transportation so they can speed up the implementation of public infrastructure projects…,” DBM said. 

That said, pandemic-related spending is not expected to abate anytime soon. “Spending for the rest of the second quarter is still expected to be mostly driven by COVID-19-related expenditures,” it added.

NOVEL CORONAVIRUS PHILIPPINE ECONOMY
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