April infra spending down by over 50%

Government spending on infrastructure fell by more than half to P28.3 billion in April, no thanks to the impasse in Congress on this year’s national budget coupled with the election ban.

Public expenditure on infrastructure and other capital outlays in April slid 56.9 percent from P65.6 billion a year ago and by 52.7 percent from P59.7 billion a month ago, the latest Department of Budget and Management (DBM) data released on Friday showed.

In a report, the DBM attributed the “significant” drop in infrastructure spending that month to “delays in the approval of the fiscal year 2019 GAA (General Appropriations Act) and election ban on the implementation of public works.”

From January to April, the government’s disbursements for infrastructure and other capital outlays declined 7.3 percent to P206.4 billion from P222.7 billion during the first four months of last year.

“Although infrastructure spending increased for the first quarter of 2019 due to the payment of prior years’ accounts payables for completed infrastructure projects, disbursements in April were lower year-on-year as some infrastructure projects were not started following the late budget approval and election ban,” the DBM explained.

To recall, the P3.7-trillion 2019 national budget was approved by President Duterte only in mid-April as the two houses of Congress squabbled over pork funds, such that the government operated under the reenacted 2018 appropriations and underspent about P1 billion a day on public goods and services at the start of the year.

Also, the Commission on Elections did not act on the economic managers’ earlier request to exempt big-ticket infrastructure projects from the election ban ahead of the May 13 midterm polls.

Moving forward, the DBM was optimistic that infrastructure spending would rebound for the rest of the year, citing that the national government was “implementing catch-up measures to mitigate the effects of the reenacted budget and to meet this year’s spending target and GDP (gross domestic product) growth.”

“For instance, during the Economic Development Cluster meeting held last May 24, the Department of Public Works and Highways and the Department of Transportation have committed to accelerate implementation of big-ticket infrastructure projects and spend P725 billion and P78 billion on infrastructure expenditures, respectively, to support the government’s target of 4.2 percent of GDP infrastructure spending of government agencies, and at least 6 percent economic growth this year,” the DBM noted.

The “bold” spending catch-up plan was aimed at reversing the four-year low GDP expansion of 5.6 percent posted in the first quarter as a result of the delays in budget implementation.