Sep 202016

President Rodrigo Duterte vowed record infrastructure outlays to around P860 billion next year. File photo

MANILA, Philippines — Infrastructure spending grew the slowest in at least 16 months in July as a transition in government also pulled down expenditures in other areas, the Department of Budget and Management (DBM) reported on Wednesday.

Capital outlays amounted to P45.9 billion during the first month of the Duterte administration, up just 0.8 percent year-on-year, much slower than the previous month’s 31.4-percent growth.

The figure also marked the slowest growth since the 5.9-percent drop by the first quarter of 2015. Monthly data for January to March 2015 were unavailable.

Broken down, actual infrastructure spending posted a “minimal” one-percent expansion to P38.7 billion. The balance was allotted for equity and support to local governments.

“Although disbursements of the DPWH (Department of Public Works and Highways) increased by P5.9 billion… it was offset by lower disbursements in the DND (Department of National Defense) and the ARMM ( Autonomous Region in Muslim Mindanao),” DBM said in a statement on its website.

Specifically, the DPWH had tie-up “convergence programs” for the building of health and school facilities with the Health and Education portfolios.

While details of such projects were unavailable, declines in the DND and ARMM could however by timing and procurement issues.

For the DND, DBM said programs for military modernization had already been bid out in the first half and that the rest are still “in various stages of procurement.”

ARMM, meanwhile, still experienced “delays in procurement” due to the election ban which prohibited bidding of projects during last presidential polls until late June.

From January to July, capital outlays remained up by a double-digit level at 38.6 percent to P340.5 billion, data showed.

President Rodrigo Duterte vowed record infrastructure outlays to around P860 billion next year, equivalent to 5 percent of economic output, from last year’s P436 billion or 3.3 percent.

That will not come easy, as DBM itself admitted signs of underspending remains in July as agencies continued to grapple with huge budgets they are unable to spend on time.

“The government is optimistic that the slowdown in disbursements recorded for this month is temporary and expected as a result of the transition to a new administration,” DBM said.

“Underspending remains a key challenge, but as agency heads devote more time in their operations…, they will soon have a better grasp of their programs and projects…,” it added.

Aside from a slowdown in infrastructure, July also saw a decline in personnel services and maintenance and operating expenditures (MOOE) by 8.4 percent and 22.5 percent, respectively.

Personnel services usually include salaries and wages for the bureaucracy, while MOOE is composed of small infrastructure projects and those spent for daily operations.

Net lending to agencies also plummeted 88 percent, while their tax expenditures for imports slumped 68.9 percent. Debt interest payments dropped by nearly a quarter.

“The government is committed to deliver with its spending commitments hence new expenditure measures would be undertaken,” DBM said, citing planned round-the-clock public construction in Metro Manila.

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