Infra spending in Q1 below target

THE AMOUNT of money spent by the government to build vital infrastructure during the first quarter was not only below target, but also lower than the previous year’s expenditures, the latest Department of Budget and Management (DBM) data showed.

According to the DBM, the government used up only P68.5 billion on infrastructure and other capital outlays during the first three months, down 11 percent from P77 billion in the first quarter of last year.

The first-quarter infrastructure expenditures were also 27.3-percent lower than the P94.3 billion that the government had programmed to spend between from January to March.

In all, capital outlays in the first quarter slid 6.3 percent year-on-year to P88.3 billion, also 23.2-percent below the program of P115.1 billion for the period. Besides expenditures on infrastructure, capital outlays also include equity as well as capital transfers to local government units.

The national government’s total expenditures from January to March amounted to P504 billion, up 4.5 percent year-on-year but 13.4-percent lower than the P582.2-billion target.

Economic growth slowed to 5.2 percent in the first quarter—the lowest since 2012—mainly as the government did not spend as much as it should on public goods and services, coupled with weak exports.

Budget Secretary Florencio B. Abad had admitted that “the problem of underspending is brought about by institutional weakness that may take some time to address,” adding that growth might remain at a sluggish pace in the coming months as the state struggled to spend the budget as programmed.

The Aquino administration has nonetheless been trying to ease spending bottlenecks. Among the initiatives included the DBM recently ordering to fill up positions at procurement units of agencies’ bids and awards committees.

Also, a National Economic and Development Authority-led subcommittee will be formed under the Development Budget Coordination Committee to evaluate project proposals worth less than P1 billion.

Another initiative is the hiring of more staff for the Public-Private Partnership (PPP) Center while also increasing the budget for its project development and monitoring facility.

The DBM has also urged Congress to force government agencies to spend their annual budgets within only a year instead of the current two-year lapsing of appropriations.

Last week, debt watchers warned of risks that the 7-8 percent growth goal for 2015 could not be achieved. “The [Philippine] government’s ambitious growth target may be difficult to achieve in the absence of more effective budget execution,” Moody’s Investor Service said in a report.