Government ramps up infrastructure spending

Defense, education projects prioritized in July

MANILA, Philippines — The government ramped up its infrastructure spending to P77 billion during the first month in office of the Marcos administration particularly on defense and education projects, the Department of Budget and Management (DBM) said.

Based on the latest disbursement performance report of the DBM, state infrastructure expenditure and other capital outlays went up by nearly six percent to P77 billion in July from P72.8 billion in the same period last year.

The DBM attributed this to the implementation of capital outlay projects under the AFP Modernization Program of the Department of National Defense and the computerization program of the Department of Education.

The DBM said these partly offset the lower disbursements recorded in the Department of Public Works and Highways (DPWH) due to the ongoing processing of some disbursement vouchers, which was expected to be completed last August.

There is also ongoing processing and documentation for payment claims of completed capital outlay projects in various agencies, the DBM said.

For the seven-month period, infrastructure spending rose by 11 percent to P554.9 billion from P499.4 billion a year ago.

This is due to the payment made by the DPWH for its completed and partially completed infrastructure projects and the implementation of the AFP Modernization Program.

On the other hand, overall government spending for July reached P395.4 billion, up 4.8 percent on a yearly basis.

Broken down, personnel services expenditures went up by 4.3 percent to P88.8 billion, attributed to the increase in the number of filled positions in the Philippine National Police  and the release of the 2020 performance-based bonus of the Philippine Army.

Combined allotment and capital transfers to local government units also jumped by 30 percent to P86.4 billion following the higher national tax allotment for LGUs due to the implementation of the Mandanas ruling.

Subsidy support to government corporations soared to P30.3 billion due to releases to the Philippine Health Insurance Corp. and the National Irrigation Administration.

Meanwhile, a decline in government spending was noted in interest payments, which decreased by 11.7 percent to P52.1 billion due to the timing of coupon payments for global bonds taken up in July 2021.

The government also recorded lower maintenance and other operating expenses at P51.5 billion, amid the timing of payouts of cash assistance due to the ongoing validation of the beneficiaries of the modified conditional cash transfer program.

This is also due to one-off expenditures such as the direct payments made by foreign lending institutions for the procurement of COVID vaccines in July last year.
Tax expenditures also fell by 63.4 percent to P1.3 billion owing to lower documentary stamp taxes on government securities.

As of end-July, the remaining balance of this year’s P5.023-trillion obligation program amounted to P327.5 billion or 6.5 percent.

“Additional releases are expected to be made in the coming months as line departments submit budget requests, complete the documentations required for release, and catch up on implementation before the year ends,” the DBM said.