Economic team ramps up infra spending for 2022-2024 | Inquirer Business
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Economic team ramps up infra spending for 2022-2024

By: - Reporter / @bendeveraINQ
/ 04:07 AM July 21, 2021

Oxford Economics: PH will be 2nd fastest growing emerging market in 2019-2028President Duterte’s economic team has jacked up the yearly public infrastructure programs for 2022 to 2024 even as local governments’ bigger budget share starting next year tempered the government’s total spending plan.

The Cabinet-level Development Budget Coordination Committee (DBCC) in its meeting on Monday raised the infrastructure budget for 2022 to P1.29 trillion (or 5.8 percent of gross domestic product [GDP]) from P1.25 trillion (5.7 percent of GDP) previously.

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The programmed infrastructure expenditures for 2023 and 2024 were also raised to P1.28 trillion and P1.35 trillion, respectively, from P1.26 trillion and P1.32 trillion earlier.

This will allow the share of infrastructure spending to GDP to average 5.4 percent in 2022 to 2024, the DBCC said.

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It said the adjusted infrastructure spending targets came on the back of the updated projections for local governments’ national tax allotment (NTA)—formerly internal revenue allotment (IRA)—and the block grant for the Bangsamoro Autonomous Region in Muslim Mindanao.

But while infrastructure spending will rise, the DBCC reduced the overall disbursement programs for 2023 and 2024 due to the local governments’ larger NTA share in the national budget.

Expenditures in 2023 were cut to P5.02 trillion from P5.11 trillion previously, while those for 2024 were down to P5.3 trillion from the P5.4 trillion.

Finance Assistant Secretary Maria Teresa Habitan said the local governments’ NTA in 2023 would be smaller than 2022 levels due to the dip in tax take during the recession last year. Under the Mandanas-Garcia ruling, the 2022 NTA should be 40 percent of all tax revenues in 2019. The 2023 allotments will be based on 2020 collections.

The NTA for 2022 will amount to P959.04 billion. This year, their IRA reached P695.49 billion.

Next year’s implementation of the Supreme Court’s 2018 decision on the Mandanas-Garcia petitions reduced the government’s fiscal space, such that Mr. Duterte ordered last month the transfer to local governments spending on local infrastructure, agriculture, social welfare, health care and livelihood.

The DBCC approved the proposal to pitch a record P5.024-trillion budget for next year, which will be submitted to Congress next week.

“The proposed 2022 national budget will continue to invest in building the country’s resilience amid the pandemic by prioritizing funding for COVID-19 response measures, such as health-care development and social services, while also ramping up economic growth through investments in public infrastructure,” the DBCC said. INQ

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