State infrastructure spending down 16.3% to ₧90B; timing of payables cited

STATE infrastructure spending as of end-February dropped by 16.3 percent to P90 billion, according to the Department of Budget and Management (DBM). 

Latest data from the DBM showed the double-digit decline in government infrastructure spending from P107.4 billion in the same period last year. 

The DBM attributed the decline to the timing of payables for projects of different departments. 

These include completed projects of the Department of Agriculture, infrastructure projects of the Department of Public Works and Highways, foreign-funded rail transport projects of the Department of Transportation, and releases for the Revised AFP Modernization Program under the Department of National Defense. 

The drop in government infrastructure spending during the period also partly tempered the expansion of other expenditure items, such as combined allotment and capital transfers to local government units given the first year of implementation of the Supreme Court’s decision on the Mandanas-Garcia petitions. 

Given these, overall government spending during the period inched up by 1.5 percent to P619.7 billion from P610.3 billion. 

Other growth drivers to overall government spending include personnel services and interest payments. 

While the DBM sees improvement in overall government spending in March this year given that agencies are likely to utilize their remaining cash allocations before they lapse, it said the 45-day public spending ban for infrastructure projects will likely result in “muted disbursements” for the second quarter of the year. 

Nonetheless, it pointed out that the Commission on Elections granted the petition of some agencies for their respective programs to be exempted from the ban, including the fuel subsidy program of the Land Transportation Franchising and Regulatory Board. 

For this year, the government has programmed to increase its spending on infrastructure to P1.27 trillion, equivalent to 5.9 percent of the country’s GDP.

Last year, state infrastructure spending reached P895.1 billion, surging by 31.3 percent from P681.5 billion in 2020 due to lower base effects and easing of quarantine restrictions.