Public expenditures on vital infrastructure jumped 42.8 percent to P493 billion last year but the government still underspent against its target mainly due to procurement woes.
The latest Department of Budget and Management data showed that the amount spent on infrastructure and other capital outlays increased from P345.3 billion in 2015 but was short of the P533.1-billion program for the year.
“Infrastructure and other capital outlays missed the target expenditures by 7.5 percent or P40.1 billion owing to procurement difficulties such as failure of biddings, non-compliance of bidders with bid requirements or difficulty in complying with product or service specifications,” the DBM said in a report.
“Moreover, the procurement and implementation of some projects under the Department of National Defense are still ongoing such as the construction of an airbase of the Philippine Air Force in Cagayan De Oro City (P1 billion) while some projects under the Revised Armed Forces of the Philippines Modernization Program are still for approval of the President. Underspending in infrastructure outlays also stemmed from the P1.8-billion funds which were not yet requested by the Philippine National Railways and the Philippine Ports Authority in connection with their memorandum of agreement (MOA) with the Department of Transportation for various rail and port projects,” the DBM added.
The DBM said government agencies were nonetheless moving so that underspending would no longer happen in 2017.
“[These] agencies are already expediting procurement activities for these programs/projects to ensure obligation this year. The DOTr for example has created an interim bids and awards committee to immediately bid out projects and programs funded under prior years’ budget and sign MOA with local government units or provincial government units and government corporations to transfer funds that will be used for projects involving site or land acquisition,” the DBM said.
For 2017, the Duterte administration has allocated P850 billion or 5.3 percent of the gross domestic product (GDP) on hard infrastructure, en route to bringing the infrastructure spending-to-GDP ratio to more than 7 percent by 2022.
In all, national government disbursements in 2016, including current operating expenditures, capital outlays as well as net lending, totaled P2.55 trillion, up 14.3 percent from P2.23 trillion in 2015 but 3.6-percent lower than the revised programmed amount of P2.65 trillion.