STATE SPENDING on infrastructure surged in April as the government ramped up construction of quarantine facilities and purchases of medical equipment in response to the coronavirus disease 2019 (COVID-19) pandemic.
The Department of Budget and Management’s (DBM) latest disbursement report showed infrastructure and other capital outlays jumped 42% to P40.1 billion in April from P28.3 billion seen in the same month last year. However, this was lower than the P62.2 billion spent in March.
The DBM attributed the spending spike to the construction of quarantine facilities for COVID-19 patients and the Health department’s purchase of medical equipment.
The government had converted the Ninoy Aquino Stadium at the Rizal Memorial Sports Complex, World Trade Center and Philippine International Convention Center (PICC) Tent Forum into quarantine facilities for mild and asymptomatic COVID-19 patients.
The DBM said the higher infrastructure spending was also due to “acquisition of transport equipment under the Revised AFP Modernization Program of the DND (Department of National Defense), and implementation of regular road infrastructure programs of the DPWH (Department of Public Works and Highways).”
Despite the spending spurt in April, infrastructure spending was still down by 4.9% to P196.2 billion in the first four months of the year from P206.4 billion a year ago.
The DBM said infrastructure spending was lower year on year due to high base effects and the temporary ban on all construction activity during the enhanced community quarantine (ECQ).
“Infrastructure spending was lower year on year due to the base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior years’ accounts payables, and the temporary suspension of construction activities due to the implementation of ECQ,” DBM said.
Luzon and other parts of the country were placed under strict lockdown starting mid-March to contain the spread of the virus. The lockdown continued through May in Metro Manila while other areas that have lower reported cases started easing restrictions in mid-May.
“The year-on-year increase in overall government spending as well as in infrastructure spending in April 2020, which already reflected the full effect of the lockdown/ECQ in Luzon, may reflect priorities by the government to increase spending and funding for fiscal stimulus measures, COVID-19 programs, and other financial assistance for the most vulnerable sectors, as these are needed most at the height of the lockdowns,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.
Overall government spending more than doubled in April to P461.7 billion, bringing total spending for the four-month period to P1.31 trillion, up 31% year on year.
The DBM said it expects overall spending for the rest of the second quarter to be largely driven by pandemic expenses, particularly the second tranche of government’s subsidy programs.
As most of the country is now under general community quarantine, infrastructure-implementing agencies may soon be able to ramp up construction work.
“This should facilitate the resumption of construction activities of the DPWH, and the Department of Transportation so they can speed up the implementation of public infrastructure projects, with the intention to catch up with the unintended delays during the ECQ,” the DBM said.
In May, key infrastructure projects under the flagship “Build, Build, Build” program were given exemption to resume construction work while observing minimum health and safety standards, such as physical distancing and testing.
The infrastructure spending target for 2020 was slashed to P833 billion from the initial program of P989 billion as government’s funds were redirected for the COVID-19 response.
However, the government is eyeing a bigger, P1.131-trillion budget for infrastructure next year as it is touted to play a key role in economic recovery. — Beatrice M. Laforga