Infra spending sharply picks up on belated release of Bayanihan 2 funds

MANILA, Philippines — Government spending on infrastructure posted a double-digit growth as of February driven by belated release of funds under the Bayanihan II law.

The Duterte administration spent P186.8 billion on capital outlays in the first 2 months of the year, up 14.4% year-on-year, data from the Department of Budget and Management (DBM) showed. 

Specifically, direct state spending on infrastructure amounted to P186.8 billion during the period, growing 56.8% on an annual basis.

The DBM attributed the climb to payments for completed projects of the Department of Public Works and Highways (DPWH), as well as the construction of farm-to-market roads of the Department of Agriculture (DA) under Republic Act 11494 or the Bayanihan to Heal as One Act. 

A pick-up of this magnitude would be crucial to putting the economy back on growth path after contracting by record-breaking 9.6% last year. But whether the ascent can be sustained is another question since funds under Bayanihan II are nearly depleted 7 months since its enactment.

As it is, fund releases under Bayanihan II have been slow that the government had to ask Congress to extend the law's validity until June this year to fully spend the money.

"Spending is expected to further pick up in March given the trend of increasing expenditures towards the third month of the quarter before the validity of cash allocations end," the budget department said. "Disbursements will then steadily ramp up towards the second quarter."

Beyond infrastructure, DBM data showed capital outlays by government corporations amounted to P45.3 billion as of February, mainly due to equity infusions to state-run Development Bank of the Philippines and Land Bank of the Philippines to finance their coronavirus lending programs.

At the same time, cities and provincial governments received capital transfers amounting to P34.1 billion in the first 2 months from the national government, up 34.7% on-year.