Government underspending continues
Government underspending persisted in the first 10 months such that the Department of Budget and Management expects total expenditures by the end of the year to fall below the program.
Preliminary data presented by the DBM during an investor conference call on Tuesday showed that the P2.037 trillion spent by the government on public goods and services from January to October was 4.3-percent lower than the P2.129 trillion programmed for the 10-month period.
End-October expenditures were, however, 11.9-percent higher than the P1.821 trillion in the first 10 months of last year.
Infrastructure spending grew year-on-year by 44.2 percent to P390.8 billion as of end-October from P270.9 billion a year ago.
However, the amount spent on infrastructure and other capital outlays from January to October was lower by a tenth than the revised program of P431.1 billion.
By the end of 2016, the DBM expects full-year expenditures to reach P2.525 trillion, or 4.6 percent below the P2.646 trillion that was programmed for spending during the entire year.
The projected end-2016 disbursements would nonetheless be 13.2-percent above the P2.231 trillion spent by the government in 2015.
Spending on infrastructure by the end of the year would hit P466.5 billion, lower by 12.5 percent than the P533.1-billion program.
The expected end-2016 expenditures on public infrastructure and other capital outlay would nonetheless be up 35.1 percent from last year’s P345.3 billion.
The Duterte administration had programmed to widen the fiscal deficit or the balance of government expenditures against revenues to 3 percent in the next six years from the 2-percent annual target during the previous Aquino administration.
The wider budget deficit will entail ramping up public spending, which Budget Secretary Benjamin E. Diokno said in a recent speech “will allow us to invest heavily in infrastructure development.”
“Infrastructure boosts productivity, generates jobs, and attracts investments. It also facilitates the conduct of business and improves the mobility of people and accessibility of basic services. We must make infrastructure a catalyst for growth instead of a binding constraint,” Diokno said.
As such, the proposed P3.35-trillion 2017 national budget had allocated P860.7 billion or 5.4 percent of the gross domestic product (GDP) to be spent on pure infrastructure next year, in line with plans to further jack up the infrastructure spending-to-GDP ratio to 7 percent by 2022, which would require up to P9 trillion in investments for the entire duration of the Duterte government.