INFRASTRUCTURE spending as of end-February slid by P20.7 percent year-on-year mainly due to the base effect of high infrastructure spending in the same period in 2019.
In its latest assessment report, the Department of Budget and Management (DBM) said infrastructure and capital outlays for the first two months of the year settled at P93.9 billion, down by P24.5 billion from P118.4 billion in the same period last year.
“The decrease is mainly attributed to the base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior year’s accounts payable for completed projects of the Department of Public Works and Highways (DPWH),” the DBM said.
As of end-February, prior year’s accounts payable of the DPWH for its capital outlays dropped to P35.2 billion from P82.2 billion a year ago. However, the DBM said this decline was partially offset by the nearly P13-billion increase in the DPWH’s current year accounts payable, the Department of National Defense’s Revised Modernization Program for the Armed Forces of the Philippines, and encashment of check floats.
Overall government spending as of end-February reached P516 billion, up by 5.2 percent or P25.4 billion from P490.7 billion in 2019 on the back of higher allotment to local government units and spending for personnel services.
For February alone, infrastructure spending also fell by 9.3 percent to P45.6 billion from P50.3 billion in the same month in 2019.
Total government spending for February also plunged by 12.2 percent year-on-year to P244.4 billion from P278.5 billion in 2019, attributed to the base effect of the Internal Revenue Allotment of local government units for January 2019—released in February—as well as lower interest payments.
With the enhanced community quarantine (ECQ) to contain the spread of Covid-19, the DBM expects government spending to be lower than the program for March due to the temporary delays in project implementation.
However, it projects that disbursements for March, and consequently for the first quarter of the year, to be higher compared to the same period last year.
As of end-February, the remaining program balance amounts to P927.5 billion or 22.6 percent of the total P4.1-trillion obligation program for the year.
The budget department said it sees increased spending for the next few months as the government uses more funds for its Covid-19 response.
This includes the purchase of medical supplies and equipment of the Department of Health, and release of cash subsidies to families and sectors affected by the ECQ.
“Spending for the rest of the year will continue to be driven largely by implementation of Covid-19 related PAPs [programs, activities and projects], as well as other measures or strategies identified and recommended by the Inter-Agency Task Force for Emerging Infectious Diseases Technical Working Group on Anticipatory and Forward Planning on how to move forward with the ‘new normal’ situation given the pandemic,” it said.
Image credits: Nonie Reyes