Infrastructure spending dipped in Oct but may still hit 2024 goal

Infrastructure spending grew at a slower pace in October following the onslaught of powerful typhoons late this year, but it did not hurt the government’s chances of beating its target for 2024.

Latest data from the Department of Budget and Management (DBM) showed direct government spending on infrastructure had amounted to P110 billion in October, up at an annualized rate of 2.6 percent. That growth, however, was slower than the 16.9-percent expansion posted in September.

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That figure formed part of total capital outlays amounting to P131.4 billion in October, marking a 6.5-percent increase compared with a year ago.

The moderate growth in infrastructure disbursements happened after the Philippines was hit by powerful typhoons from late October to mid-November, which may have disrupted construction activities.

For its part, the DBM explained that infrastructure spending was “nearly flat” because of lower disbursements posted by the transportation and defense departments “due to the different timing of releases or schedule of payables for their big-ticket capital outlay items.”

That offset the “larger expenditures” recorded by the Department of Public Works and Highways for its road and bridge network infrastructure program.

”These, in turn, weighed down on the growth of infrastructure spending for October,” the DBM said.

P1.54T outlays targeted

Figures showed total capital outlays from January to October had risen by 13.4 percent year-on-year to P1.3 trillion. Of that amount, direct spending on infrastructure jumped by 13.2 percent to P1.1 trillion.

The DBM said overall infrastructure expenditures were projected to reach P1.54 trillion in 2024, or 5.8 percent of gross domestic product (GDP). The forecast was only based on actual disbursements as of September and the estimated spending for the fourth quarter, the department said, adding that the numbers may still change.

But if that prediction comes to pass, the Marcos administration would exceed its target this year to spend P1.5 trillion on infrastructure, equivalent to 5.6 percent of the GDP. This aspiration not only includes direct state investments in infrastructure but also subsidies to state-run corporations and capital transfers to municipalities to bankroll their local infrastructure undertakings.

By the end of his term in 2028, President Ferdinand Marcos Jr. wants to jack up state spending on infrastructure to P2.14 trillion, accounting for 5.8 percent of GDP. INQ