Infra spending down 12.2% at end-May as lockdown halted projects’ construction

MANILA, Philippines — The amount spent by the government to build infrastructure during the first five months declined 12.2 percent year-on-year to P235.2 billion as construction of public projects stopped at the height of the COVID-19 quarantine which was said to be one of the most stringent in the region.

The latest Department of Budget and Management (DBM) data released Monday showed that disbursements on infrastructure and other capital outlays from January to May dropped from P267.9 billion a year ago.

In a report, the DBM blamed the lower expenditures on public infrastructure during the first five months to “base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior years’ accounts payables, and the temporary suspension of construction activities due to the ECQ,” referring to the enhanced community quarantine imposed in Luzon and other parts of the country with high COVID-19 cases in a bid to contain the spread of the deadly coronavirus.

The ECQ that started in mid-March had put a halt to 75 percent of the economy, which slid into a recession and shed millions of jobs.

The Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) had thumbed down the economic team’s earlier proposal for implementing agencies to continue construction of big-ticket infrastructure projects even as there was a lull in other economic activities during the lockdown.

The COVID-19 lockdown was gradually eased to general community quarantine (GCQ) by June, which allowed three-fourths of economic activities, including construction, to resume with minimum health standards.

During the month of May alone, infrastructure spending fell 36.7 percent to P38.9 billion from P61.5 billion a year ago, which the DBM attributed to “the stoppage of construction activities due to the extended implementation of the ECQ for most part of Luzon and key areas in the Visayas regions.”

As the economy moved to less-restrictive quarantine, the DBM said “infrastructure activities are ongoing as both the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) remain committed to fast-track construction works despite the onset of the rainy season, especially in areas which have transitioned to GCQ and modified GCQ such as in the Visayas, Mindanao, and most parts of Luzon.”

The economic team was currently reviewing the Duterte administration’s ambitious “Build, Build, Build” program in consideration of available fiscal space for infrastructure projects from 2020 to 2022; project readiness and implementation capacity of line agencies; economic growth and jobs impact of projects; interest and risk level of the private sector; and inclusion of health and digital economy projects to address emerging needs from COVID-19 and the “new normal” it brought.

As the government prioritized COVID-19 response, the Cabinet-level Development Budget Coordination Committee (DBCC) last May adjusted this year’s infrastructure program to P775.1 billion, equivalent to 4 percent of gross domestic product (GDP)—below last year’s actual disbursements of a record P1.05 trillion.

For next year, the DBCC wanted to set aside P1.18 trillion or 5.5 percent of GDP for infrastructure, as the proposed P4.3-trillion 2021 national budget will be geared towards economic recovery post-pandemic partly through “Build, Build, Build.”

JPV