Infrastructure spending fell 22.8% to P681.1B in 2020

MANILA, Philippines — As some big-ticket projects took a backseat to COVID-19 response, public infrastructure spending fell by over a fifth to P681.1 billion in 2020.

The Department of Budget and Management’s (DBM) latest report Friday showed disbursements on infrastructure and other capital outlays last year dropped 22.8 percent from P881.7 billion in 2019.

But actual infrastructure expenditures exceeded by 11.8 percent the 2020 program worth P609.3 billion, which had been downscaled when the government realigned budget items—many of the projects of the departments of Public Works and Highways (DPWH) and of Transportation (DOTr)—into the war chest to fight COVID-19 under the Bayanihan to Heal as One Act or Bayanihan 1 Law.

It did not help that construction works were stopped at the height of the longest and most stringent COVID-19 lockdown in the region which imposed restrictions on the movement of people and non-essential goods, hence delaying some projects’ implementation.

In December alone, infrastructure spending declined 25.6 percent year-on-year but climbed 228.5 percent month-on-month to P132.3 billion.

The DBM said the year-on-year drop last December narrowed compared to November’s negative 50.2 percent and October’s minus 30.6 percent, “indicative of the improving pace of project implementation and the gradual recovery of the infrastructure sector in general.”

In the fourth quarter of 2020, disbursements on public infrastructure dropped 32.7 percent year-on-year to P229.6 billion, which was 28.7-percent bigger than the P178.3-billion program for the three-month period due to “additional cash requirements of the DPWH for settlement of accounts payables for completed or partially completed infrastructure projects,” DBM said.

Including the infrastructure components of equity injected and subsidies given away to state-run corporations plus transfers to local governments, DBM said total national government-funded infrastructure last year reached P869.5 billion, surpassing the P785.5-billion program by 10.7 percent but 17.2-percent lower than the P1.05 trillion spent in 2019.

As a share of GDP, overall infrastructure spending in 2020 was equivalent to 4.8 percent—higher than the target of 4.2 percent but below 2019’s 5.4 percent.

For 2021, the government plans to implement P1.17-trillion worth of infrastructure projects, equivalent to 5.9 percent of GDP.

But as of mid-February, DBM released P3.45 trillion or 76.5 percent out of the P4.51-trillion national budget, a slower pace than the 77.4 percent released a year ago, the latest allotment releases DBM data also released Friday showed.