By Beatrice M. Laforga
Reporter

INFRASTRUCTURE spending would probably recover this year with a national budget already in place, after lagging in the 11 months through November, the Budget department said on Thursday.

Infrastructure expenditures jumped 28.6% year-on-year to P80.9 billion in November, even as the 11-month tally fell 2.6% to P709.4 billion, data from the agency showed.

“We see the economy firing on all cylinders this year with substantially higher government spending on infrastructure and social services, stronger domestic consumption responding to a benign inflation, and a revitalized agricultural sector,” Finance Secretary Carlos G. Dominguez III said in a speech at an event in Makati City yesterday.

“Surely, the public spending side of the growth equation will spur economic activity over the next few months,” he added.

Budget officials traced the spending surge in November to payments made for completed and partially completed infrastructure projects of the Public Works and Transportation departments. Projects covered included roads, bridges, flood control structures, sea and airports.

Payments of the Transportation department for right-of-way acquisitions contributed to higher spending, the Budget department said in a report.

Construction of buildings for the Land Transportation Office and Land Transportation Franchising and Regulatory Board also lifted spending during the month, it said.

“The surge may have come from the government’s spending catch-up plan,” UnionBank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in an e-mail.

“The government has been trying to disburse the 2019 national budget since its late passage into law last April 2019,” he added.

The Budget department report traced the 11-month lag in infrastructure spending to the delay in the approval of last year’s national budget and an election-related spending ban.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the economy would probably grow by 6.4% to 6.8% this year as investments pick up.

“We still have more drivers,” he said in a speech at an insurance event yesterday, noting that investments or capital formation accounts for about 30% of the Philippine economy.

“So that would be another surprise that could come, because loan growth only started to pick up,” he added.

First-quarter gross domestic product growth (GDP) could quicken by as much as 7%, he said, noting that this year’s P4.1-trillion national budget had been enacted as early as Jan. 6.

“It would be a factor on how fast the government would catch up on spending,” Mr. Ricafort said, referring to the first-quarter infrastructure spending performance.

The economy grew by 5.9% last year, slower than expected and missing the government’s 6% to 6.5% goal. It was also slower than GDP growth of 6.2% in 2018.

Growth last year broke the seven-year streak of at least 6%, and was the slowest in eight years.

“We still consider 5.9% (growth) relatively decent and resilient,” Mr. Ricafort said, citing government underspending and the effects of the US-China trade war.

Socioeconomic Planning Secretary Ernesto M. Pernia earlier said a percentage point was lost due to the delayed passage of last year’s national budget, which left government programs and new infrastructure projects with no funding.

Projects were further delayed by the 45-day public works ban before the midterm elections in May 2019.

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