MANILA, Philippines—Public Works Secretary Rogelio Singson has promised to spend 80 percent of the P90-billion budget for infrastructure in 2011, following pressure from senators anxious to raise the country’s economic productivity.
Members of the Senate finance committee have complained that the Department of Public Works and Highway’s hesitance to spend has slowed down the growth of the gross domestic product.
Senator Edgardo Angara stressed that labor would benefit from robust government spending since 20 percent of infrastructure spending usually translated to payments made to construction workers involved in the projects.
The DPWH is in charge of highway, bridge and floodway construction nationwide.
“As of June 30, the report that reached us is that less than P500 million of the capital outlay budget has been allocated and disbursed,” Senate finance chairman Franklin Drilon noted on Monday.
“This has resulted in the contraction of public infrastructure and so has affected GDP growth, which was reduced to only about 4% for first half of 2011,” Drilon said.
“We are confident that following commitments made by Secretary Singson, expenditures will be accelerated so by the end of 2011, actual total disbursement of these funds would be about P80 billion,” Drilon added.
In earlier budget hearings, government officials consistently told senators that the executive branch greatly reduced spending since President Aquino took over the reins of government to reduce corruption and curb the growth of the country’s deficit.
“We had to implement a certain kind of discipline in implementing projects. We have to make sure projects funded are the right projects,” Singson explained.
He added that as of July, the DPWH had spent an additional P26 billion in infrastructure and P37 billion more as of August.
However, senators warned that less government spending had adverse effects on growth and asked Malacañang to reconsider this policy.
“Allowing projects meant for 2011 to migrate to 2012 because of non-execution can cause difficulties. By next year, you also lined up a number of projects that could be affected by the delay. It is possible either you suppress new projects or be pressured to increase revenues in order to maintain a programmed deficit and GDP growth,” Drilon warned Singson.
For 2012, the DPWH has asked for a total budget of P125 billion. From this amount, P99.3 billion would be spent for capital outlay consisting of P82.6 billion for locally funded projects and P16.7 billion as counterpart for foreign-assisted infrastructure programs.
Drilon considered the fund “grossly inadequate” even if the amount appeared huge. “We need a lot of catching up with neighboring countries. The World Bank estimates that we need P550 billion for new infrastructure, or 5 percent of the GDP.”
“In the Asean region, we are second from last in terms of competitiveness. We only beat Cambodia when Singapore, Malaysia, Thailand and Indonesia are above us in terms of competitive ranking,” Drilon added.