End-October infra spending up 38.1 percent to P702.4-B

MANILA, Philippines—Public infrastructure spending climbed by nearly four-fifths to P702.4 billion as of end-October as the government continued work on roads and airport projects, the Department of Budget and Management (DBM) said on Thursday (Dec. 23).

In a report, the DBM said expenditures on infrastructure and other capital outlays from January to October grew 38.1 percent from P508.5 billion a year ago.

The DBM attributed the jump in 10-month infrastructure disbursements to projects being rolled out by the Department of Public Works and Highways (DPWH), the Department of Transportation’s (DOTr) aviation transport projects, various departments’ capital outlays, as well as the Department of National Defense’s (DND) revised Armed Forces of the Philippines (AFP) modernization program to build up the country’s military defenses.

Including infrastructure-related transfers to local governments as well as subsidies and equity granted to state-run corporations, total spending rose 31.4 percent to P884.3 billion during the first 10 months from P672.7 billion last year.

In October alone, the amount spent by the national government on infrastructure grew 6.7 percent year-on-year to P60.9 billion, although 14.4-percent lower than September’s P71.2 billion.

The DBM said the bigger year-on-year infrastructure spending in October was mainly the result of various DPWH projects like construction and improvements on roads, bridges, flood structures and drainage systems and multi-purpose buildings.

“The direct payments made by development partners for the various foreign-assisted road network and flood control projects of the DPWH and the foreign-assisted rail transport sector projects of the DOTr also contributed to the said increase,” the DBM added.

The government had programmed P1.02 trillion in spending on infrastructure this year, equivalent to 5.2 percent of gross domestic product (GDP).

But the economic team belonging to the Cabinet-level Development Budget Coordination Committee (DBCC) last week said it expects actual expenditures to reach a higher P1.09 trillion—or 5.6 percent of GDP—including infrastructure payables in the current year’s national budget as well as previous years’ obligations.

Infrastructure spending had been programmed to stay above 5 percent of GDP in the next three years — 5.9 percent (P1.27 trillion) next year, 5.5 percent (P1.29 trillion) in 2023 and 5.4 percent (P1.38 trillion) in 2024.

Separately, the World Bank said in a report that the implementation of the Metro Manila flood management project being rolled out by the DPWH and the Metropolitan Manila Development Authority (MMDA) was “moderately satisfactory.”

“The modernization of Balut pumping station was completed and the pumps are fully operational with a total pumping capacity that is more than double the original one,” said WB.

“The station has performed well during the recent rainy season,” it said.

“Modernization of several other pumping stations is ongoing, while investigations and designs for the modernization of more pumping stations are ongoing,” World Bank said.

“A number of activities related to solid waste management continue to be implemented, including cleaning of waste from pumping stations, community-based awareness creation initiatives, and increased efforts to recycle waste, including plastics,” it added.

Co-financed by the World Bank and the Beijing-based Asian Infrastructure Investment Bank (AIIB), the massive flood control project would protect 1.7 million residents near 56 “potentially critical” drainage systems across 11,110 hectares of flood-prone areas in Metro Manila. Upon project completion in 2024, these areas should be free of water within 24 hours after a major rainfall.

On the other hand, the World Bank lamented the long-delayed, “moderately unsatisfactory” implementation of the 12.2-kilometer Cebu bus rapid transit (BRT) system.

“Though project implementation was affected by the COVID-19 pandemic, the DOTr continued to move the project forward despite serious constraints,” World Bank said.

“Since project implementation will go beyond the initial loan expiry date of June 30, 2021, the World Bank closing date was extended by two years to June 30, 2023,” it said in a separate report.

In 2014, the World Bank approved a $116-million loan for the project, aimed at helping Cebu City — the country’s oldest — reduce pollution and traffic, create jobs, as well as make the metropolis a more attractive investment destination. But so far, only 19 percent of the World Bank’s commitment or $22.1 million had been disbursed due to various issues.

TSB