State infrastructure spending, other capital outlays maintain growth

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STATE SPENDING on infrastructure and other capital outlays surged in July on roadworks and flood control projects, along with the purchase of heavy capital equipment for the military and the coast guard, the Department of Budget and Management (DBM) said on Wednesday.

The government disbursed P84.5 billion in July, climbing 74.6% from the P48.4 billion it spent in the same month last year.

It also picked up 17.6% from P71.9 billion recorded in the previous month.

“The implementation of infrastructure projects by the Department of Public Works and Highways (DPWH) continues to pace infrastructure disbursements,” Budget Secretary Benjamin E. Diokno said during a media briefing on Wednesday.

“In particular, these include nationwide road construction, improvement, and widening projects; the Pasig-Marikina River Channel Improvement Project, and other flood control, drainage, and dike improvement and rehabilitation projects.”

He also noted that it includes acquisitions under the Frigate Acquisition Project and Civil Engineering Equipment Acquisition Project of the Armed Forces of the Philippines, as well as the procurement of machinery, aircraft, and aircraft equipment of the Philippine Coast Guard.

“The drivers are infrastructure and part of it is also acquisition of military hardware. So that explains the increase but it’s mostly ‘Build, Build, Build.’ That’s really impressive considering last year was already high.” said Mr. Diokno.

In the January-July period, the government spent a total of P437.2 billion in infrastructure and other capital outlays, up 47% from the P297.5 billion posted in the same period in 2017.

This is equivalent to 56.39% of the P775.37 billion full-year target.

The government targets infrastructure spending to be equivalent to 7.3% of gross domestic product by 2022, when President Rodrigo R. Duterte ends his term, from the actual 5.6% last year.

Allotment releases reached P3.447-trillion in the first seven months of the year, equivalent to 92% of the P3.767-trillion budget.

“The rate of allotment release as a share of the obligation program is faster this year compared to the 87% rate recorded in end-July 2017. The speedier release of allotments is crucial in ensuring that funds are obligated before December 31, 2018,” Mr. Diokno said.

“With the shift to an annual cash-based appropriations in 2019, the swift release of allotments will enable agencies to disburse their funds within the fiscal year, up to the extended payment period,” he added.

The proposed P3.575-trillion budget for next year only programs funds sufficient for projects that can be procured and implemented within a fiscal year, and could be paid up to six months after the fiscal year.

“We are doing our best to fast-track the release and disbursement of funds for public programs and projects. We maintain our projection that underspending will be eliminated under our watch. Looking ahead, the shift to an annual cash-based system will further enhance spending efficiency as performance will be measured on concrete outputs and not just on contracts awarded,” said Mr. Diokno. — Elijah Joseph C. Tubayan