Infrastructure spending surged 63% in June

MANILA, Philippines—Infrastructure spending rose by nearly two thirds in June as the government tried to catch up on disbursements after falling behind for two months.

The Department of Budget and Management (DBM) on Wednesday said year-on-year infrastructure spending rose by 62.7 percent to P24.4 billion in June alone, bringing total government disbursements to P987.7 billion in the first six months of 2014.

According to the DBM, total government disbursements as of end-June registered a P97-billion, or 10.9-percent, increase over the P890.8 billion recorded in 2013.

Quicker disbursements in June helped drive spending for the first semester, as expenditures for the month rose by 44.1 percent year on year.

“Spending in June certainly sped up, with major implementing agencies picking up the slack and rolling out their projects,” Budget Secretary Florencio Abad said in a statement.

“These infrastructure projects actually open up job opportunities, helping us bring immediate- and long-term benefits to communities around the country,” he said.

The DBM reported that the year-on-year spike in infrastructure disbursements in June was due largely to the release of P4.9 billion for the Aircraft Acquisition Project under the Revised AFP Modernization.

Key infrastructure projects under the Department of Public Works and Highways (DPWH) also contributed to the higher level of spending for the month.

Abad also noted that subsidies to government-owned or -controlled corporations (GOCCs) helped spur the upsurge in June disbursements, as these subsidies went up by nearly six-fold to reach P46.3 billion for the month, as opposed to the P7 billion tracked in June 2013.

The leap in GOCC subsidies was due mostly to disbursements made for various socio-economic development services under GOCCs, including the premium subsidies of indigent families under the National Health Insurance Program, the resettlement of informal settler families from high-risk areas.

Nationwide electrification projects under the National Electrification Administration also helped drive spending.

“This year’s budget continues to respond to the country’s development requirements, even as we’re in the middle of presenting the next year’s proposed budget to Congress,” Abad said.

Hiking infrastructure spending is one of the key pillars of the Aquino administration’s economic platform. By 2016, the government hopes to spend at least the equivalent of 5 percent of gross domestic product (GDP) on infrastructure, in line with regional norms, from just 1.8 percent in 2010.–Paolo G. Montecillo