INFRASTRUCTURE EXPENDITURE by the national government fell by 11.1% annually in August, as heavy rains hampered the implementation of public works projects, the department Budget and Management (DBM) said.
In its latest report posted on its website on Tuesday, the DBM said infrastructure and other capital expenditures fell to P108.6 billion from P122.1 billion a year earlier.
Month-on-month, infrastructure spending fell 13.1% from P125 billion in July.
The DBM attributed the decline to lower disbursements by the Department of Public Works and Highways (DPWH) due to “adverse weather conditions that delayed the implementation of the project.”
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said recent typhoons had caused heavy flooding that caused delays infrastructure projects.
The DBM also cited “delays in submitting billing documents by contractors, which impacted timelines for processing and releasing payments for ongoing projects.”
There were also adjustments to project timelines as some major infrastructure projects were delayed or rescheduled, the report said.
About 22 billion euros in outstanding checks had not yet been cashed by contractors at the end of August, the DBM said.
“Similarly, capital expenditure declined year on year without the large expenditure on local counterpart funds for the various foreign-backed projects of the DoTr (Department of Transportation),” the DBM said.
As of August 31, major allocation releases include P13.3 billion under the DoTr for capital expenditures.
This was allocated “largely to cover required loan proceeds for the implementation of the Davao Public Transport Modernization Project and for the payment of priority charges related to the implementation of the Metro Manila Subway Project Phase I and the North-South Commuter Railway. System,” said the DBM.
At the end of August, around €3.7 billion was also released to the Ministry of Information and Communications Technology as part of the funding requirements for the government’s free Wi-Fi internet connectivity program in public places.
In the January-August period, spending on infrastructure and other capital expenditures rose 14.2% to P845.3 billion from P740.3 billion a year ago.
The DBM expects infrastructure spending to improve following the issuance of P15.1 billion in allocations to the DPWH in September. This will mainly cover the government’s counterpart requirements for several foreign-backed projects this year, such as the Metro Manila Subway, the North-South Commuter Railway System, and the Davao Public Transport Modernization Project.
About P10 billion will be allocated for the revised modernization program of the Armed Forces of the Philippines.
Mr Ricafort said the agencies would likely increase infrastructure spending before the 2025 midterm elections.
“In the coming months, government spending, especially on infrastructure and other projects, could accelerate in preparation for the midterm elections, especially before the election ban, which could be an important source of economic growth.”
Nigel Paul C. Villarete, senior advisor on public-private partnerships at the technical advisory group Libra Konsult, Inc., said the government must implement catch-up plans as bad weatherFperfect construction schedules.
“In the middle of the year and later, there will be many more deviations in expenditure due to the onset of the rainy season, which has a significant impact.Ficant eFfect on construction schedules,” he said in a Viber message.
The government aims to spend 5-6% of gross domestic product on infrastructure this year. — Beatriz Marie D. Cruz