Infra spending down 20% in April

Infrastructure spending declined by over a fifth year-on-year in April to P33.5 billion due to the lack of big-ticket projects unlike in the same month last year when several projects were implemented ahead of the elections.

Expenditures on infrastructure and other capital outlays in April were down 21.2 percent from P42.5 billon a year ago and by 30.1 percent from P47.9 billion a month ago, the latest Department of Budget and Management data showed.

In a report, the DBM blamed the decline “largely on account of the absence of big-ticket capital expenditures in the Department of National Defense-Armed Forces of the Philippines Modernization Program such as the purchase of FA-50 aircraft and anti-submarine helicopters which contributed around P3.7 billion to total disbursements in the same month in the 2016.”

“For this year, similar AFP Modernization Program projects are programmed in the second semester as the approval and procurement of the same are still ongoing,” the DBM said.

Also, “disbursements of the Department of Public Works and Highways were lower year-on-year” because “the acceleration of the implementation and completion of capital outlay projects prior the conduct of elections resulted to high disbursements in the DPWH in April 2016,” the DBM added.

For this year, however, implementation of DPWH projects under its road network services —including road widening, repair and rehabilitation and flood control projects, among others—are still underway, the DBM said.

Disbursements for infrastructure and other capital outlays increased 2.6 percent to P151 billion from P147.2 billion during the first four months of last year.

Total expenditures in April alone—including current operating expenses, capital outlays and net lending—declined 4.5 percent to P183.1 billion from P191.6 billion a year ago.

“Spending for the month was lower year-on-year primarily due to combined effects of election-related and one-off big-ticket capital expenditures. Based on historical trends, spending grows faster during the first two quarters of a presidential election year since implementation and completion of various priority programs and projects of the outgoing administration are accelerated ahead of the transition. Growth then subsides during the first six months of the new administration as it begins to shape its expenditure policies and continues up to the early part of the following year as the effect of election spending wanes down,” the DBM explained.

At end-April, total disbursements inched up 2 percent to P798.4 billion from P783.1 billion in the same four-month period of 2016.