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Infrastructure slowdown dents state capital spending

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Calungbuyan Bridge
DPWH

THE NATIONAL GOVERNMENT’S capital spending slipped in October as spending on infrastructure declined, the Department of Budget and Management (DBM) reported on Monday.

State spending on goods and services, including infrastructure, totaled P96.9 billion in October, down seven percent from a year earlier.

Spending on infrastructure and other capital outlays, fell 12.9% to P82.2 billion “mainly from lower capital spending of agencies as compared to the previous year.”

That month’s total was a reversal of the 53.9% year-on-year surge in September to P100.3 billion and the fifth contraction in infrastructure spending recorded so far this year.

The 10 months to October saw capital outlays drop six percent year on year to P757.8 billion, with infrastructure spending down 5.5% to P628.5 billion.

According to the DBM, the benefits of capital outlays extend beyond one fiscal year as they add to government assets.

The government’s allotments and capital transfers to local government units (LGU) in October rose 20.4% to P53.8 billion due to higher Internal Revenue Allotment shares and releases from the Local Government Support fund. “These forms of assistance to LGUs are primarily for the improvement of local infrastructure such as repair and rehabilitation of local access roads, bridges, drainage systems, and evacuation centers,” the DBM said.

Meanwhile, government expenditure on personnel services inched up 6.9% year on year to P83.4 billion in October following the fourth tranche of salary hike of government employees and on higher base pay and pension requirements of military and uniformed personnel.

On maintenance and other operating expenses, the national government spent 4.9% less at P61.3 billion that month, bringing the year-to-date total to P452.8 billion, four percent more than the year-earlier P435.3 billion.

Subsidies to state firms, meanwhile, rose nearly fivefold to P7.2 billion from P1.6 billion a year earlier, largely due to releases to the Philippine Health Insurance Corp. for its National Health Insurance program and to the Rice Buffer Stocking program of the National Food Authority, which builds up inventory at a support price typically higher than prices offered by private traders.

“Line agencies have two more months to request the release and to obligate funds before the end of the fiscal year,” the DBM said in the report.

“This could strongly drive spending as line agencies also try to complete their programs and projects and settle payables before the year ends.”

The Budget department also said the Notice of Cash Allocation disbursement likely posted a higher growth rate in November at about 25% compared to the 20.5% increase in the previous year, based on preliminary data from the Bureau of the Treasury.

RELEASES
In a separate report, the department said yesterday that it had released 98.9% of the this year’s budget, equivalent to P3.622 trillion, as of the end of November.

The government now has P39.45 billion left to disburse this month to complete releases for this year’s budget of P3.662 trillion.

Of the total releases, P2.056 trillion went to offices under the Executive branch, Congress and the Judiciary.

Releases from Special Purpose Funds totaled P369.04 billion, which includes budgetary support to government corporations, allocations to local governments, the contingent fund, the miscellaneous personnel benefits fund, the national disaster risk reduction and management fund as well as the pension and gratuity fund.

“The immediate release of funds by the DBM will ensure that national government agencies are able to swiftly implement their programs and projects, such as the construction of new roads, schools, and hospitals, and the protection and promotion of the welfare of the poor and marginalized sectors, among others,” the department said. — Beatrice M. Laforga





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