UK think tank: PH infra growth ‘slow’ as DPWH, DOTr can’t fully spend budgets

The Philippines stood to gain much from its ambitious infrastructure spending spree but rollout of projects so far had been “slow” as implementing agencies struggled to spend bigger budgets, UK-based Oxford Economics said.

“Boosting growth via increased infrastructure spending is a priority for the Philippine and Indonesian governments, but progress has been slow in both,” it said.

The think tank said its model showed that infrastructure spending would account for 1.7 percentage points (ppts) of Philippine GDP.

In its April 23 report, Oxford Economics said if the Duterte administration wanted to fling annual GDP growth to 7 percent, infrastructure’s share should increase by another 1.2 ppts.

The research firm, however, said “a key issue is the limited capacity of major government departments” to use their budget allocations in full.

It acknowledged that the COVID-19 pandemic had given another priority in spending.

It added, however, that public capital expenditures was likely to “pick up as normalcy is gradually restored.”

The Duterte administration’s economic and infrastructure teams had maintained that there shall be no downsizing of the P4.4-trillion “Build, Build, Build” as infrastructure development would allow quick economic recovery after the pandemic.

President Rodrigo Duterte had made this clear in his marching orders to acting Socioeconomic Planning Secretary Karl Kendrick T. Chua.

But Oxford Economics’ estimates of the implementation rates of the 100 flagship projects on a longer “Build, Build, Build” list showed that the Department of Public Works and Highways (DPWH) and Department of Transportation (DOTr) had failed to spend all capital outlay funds, which continued to increase yearly. The think tank cited Commission on Audit reports.

The UK think tank, however, said it saw increased spending by the two departments from 2016 to 2018. During those years, the think tank said, spending grew by average rates of 34.9 percent and 6.1 percent.

Edited by TSB