Infra spending surged in Sept to P139.1B

Public spending on infrastructure surged by 11 percent in September after the government paid some of its bills to contractors and amid “faster implementation” of ongoing projects.

Capital outlays surged to P139.1 billion in September, data released by the Department of Budget and Management (DBM) on Friday showed.

From January to September, capital outlays amounted to P1 trillion, up 10.4 percent year-on-year. The amount spent so far was also 12.3 percent above the nine-month target of P904.4 billion.

Specifically, direct spending on infrastructure reached P117.3 billion in September, 18.3 percent higher compared with a year ago. Since the beginning of the year, outlays amounting to P857.6 billion directly went to infrastructure, up 19.1 percent year-on-year.

Explaining the growth, the DBM said the Department of Public Works and Highways (DPWH) had been faster in implementing its projects, particularly construction, rehabilitation and maintenance of roads, bridges and flood control structures. The brisk infrastructure activities meant the government had to be quick in paying contractors they hired for the projects.

As it is, the growth supports the Marcos administration’s ambition of powering up infrastructure spending to 5 to 6 percent of gross domestic product (GDP). Past administrations have tried to bridge the Philippines’ wide infrastructure gap in a bid to attract more investments, especially in the countryside.

Economic managers said they were implementing a catchup plan to arrest underspending. Those efforts, they said, paid off after growth in state spending contributed 36% to the forecast-beating 5.9 percent GDP expansion in the third quarter.

Breaking down the September outlays, P21.7 billion was given to towns, cities and municipalities to help them build infrastructure in their localities, albeit down 16.7 percent year-on-year. That amount brought the nine-month tally to P161 billion, 20.2 percent lower compared with a year ago.

Figures also showed P100 million was given to state-owned corporations as equity for big-ticket projects, up at an annualized rate of 4.9 percent. From January to September, the amount fell 69.7 percent year-on-year to P300 million.

Moving forward, the DBM said it expects the government to hit its spending targets for the rest of 2023 as agencies rush to pay their obligations before the closing of books at the end of the year.