The Department of Budget and Management (DBM) said the 2020 infrastructure spending target has been reduced to P833 billion from P989 billion to account for funding realignments to contain the pandemic, though 2021 spending plans have been expanded to stimulate growth.
Budget Undersecretary Laura B. Pascua told BusinessWorld that the new infrastructure spending target for 2020 is estimated to be equivalent to 4.6% of gross domestic product (GDP).
The P883-billion target represents an increase from the estimates of P728.1 billion in early May and P800.6 billion in March, after a consensus hardened withn the economic team to protect infrastructure from further cuts in order to help revive the economy.
The new target remains lower than the P1.05 trillion spent in 2019.
In 2021, the infrastructure spending target is P1.131 trillion or 5.3% of GDP, according to a statement issued late Thursday by the Budget department.
The expanded infrastructure program for 2021 is expected to account for 0.9 percentage points of GDP next year.
GDP this year is still officially projected to contract by 2-3.4%.
The projected economic growth range for 2022, meanwhile, was lowered to 6-7% from the 7-8% estimate given previously.
The Development Budget Coordination Committee (DBCC) approved on May 27 the new projections and fiscal program , revising some of estimates made on May 12.
The DBCC increased the budget for infrastructure next year “to push the completion of a number of major flagship projects for 2021 and 2022,” which are estimated to create 140,000-220,000 additional jobs both directly and indirectly.
It also proposed a higher cash-based budget ceiling for next year of P4.335 trillion, or 20.2% of GDP.
“The higher proposed cash-based budget for next year aims to support the ‘Build, Build, Build Program’ to help stimulate economic growth. With higher infrastructure investments, the country’s recovery from the COVID-19 pandemic can be better assured by generating more jobs in 2021,” it said.
The DBM said the higher 2021 budget will support programs, activities and projects that will improve the country’s capacity to respond to the coronavirus pandemic by boosting the health system, ensuring food security, digitize government transactions and assist communities to adapt to the “new normal.”
“The FY 2021 budget will also give priority to crucial and shovel-ready infrastructure projects that will promote better health services, ease of transportation and mobility of essential goods, as well as IT infrastructure that will lead to the establishment of an ICT-enabled government,” it said. — Beatrice M. Laforga