Infra, capital spending up in August

By Anna Leah E. Gonzales | The Manila Times
October 19, 2021


State infrastructure and capital outlays grew by 60.2 percent in August, according to the Department of Budget and Management (DBM) on Monday.

Data showed that infrastructure and other capital outlays amounted to P70.9 billion during the month, up from last year’s P44.3 billion.

It was, however, lower than the P72.8 billion recorded in July.

According to the DBM, the year-on-year increase is attributed mainly to the implementation of various road infrastructure projects of the Department of Public Works and Highways (DPWH) such as construction/completion/repair/rehabilitation/improvement of government buildings, access, by-pass, and diversion roads, bridges, flood mitigation structures and drainage systems.

The increase was also due to aviation infrastructure projects of the Department of Transportation (DOTr), in particular the Tacloban, Kalino, and Bukidnon airport projects.

The DBM said projects under the revised AFP Modernization Program (RAFPMP) of the Department of National Defense and capital outlay projects of state universities and colleges such as the Smart Campuses Program also contributed to the increase.

Infrastructure and capital expenditure raised the overall disbursements to P2.9 trillion from January to August. This was an improvement of 11 percent over the previous year’s figure of P2.67 trillion.

“The large expansion is due mainly to higher infrastructure and other capital outlays, which rose by P175.8 billion or 44.6 percent and accounts for 60.2 percent of the total P292.2 billion growth in spending recorded for the period,” said the DBM.

“The other major drivers of spending growth are personnel services (up by P58.4 billion or 8.2 percent), combined allotment and capital transfers to LGUs (up by P56.3 billion or 10.4 percent), equity (up by P45.4 billion), interest payments (up by P21.9 billion or 8.1 percent), and tax expenditure subsidy (up by P8.4 billion or 51.9 percent),” it added.

In a comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said infrastructure spending could ramp up in the latter part of the year as the economy re-opens further from lockdowns amid increased vaccination as well as in preparations for the May 2022 elections, especially before the election ban on some public works from March 25 to May 8, 2022.

“Increased infrastructure spending is one of the pillars of the country’s economic recovery program to stimulate the economy, creating more jobs, accelerating development of the countryside, especially along the path of the infrastructure projects that also create new commercial, industrial, and residential areas, as well as more economic opportunities for supplies, contractors, and those in the supply chain of the various infrastructure projects,” he said.

He noted that Further improvement of the country’s infrastructure would also accelerate economic development especially in areas outside Metro Manila, as well as help attract more investments in the country.

The DBM for its part said that for the remaining months of the year, infrastructure and other capital expenditures will also continue to drive government disbursements.

“Infrastructure and other capital expenditures will continue to drive government disbursements for the remaining months as payables for completed and partially completed infrastructure activities become due and demandable, alongside the regular operating expenditures of various line departments,” it said.