STATE infrastructure spending as of end-May declined by 12.2 percent year-on-year or P32.8 billion, partly because of the temporary suspension of construction activities due to the Covid-19 lockdowns.
In its latest report on the government’s disbursement performance, the Department of Budget and Management (DBM) said infrastructure spending for the first five months of the year dropped to P235.2 billion from P267.9 billion in the same period last year.
Apart from the lockdown, the DBM also attributed the decline to the base effect of high infrastructure expenditures in the five-month period last year, brought about by the payment of prior years’ accounts payables.
Despite the dip in infrastructure spending, overall government expenditures for the period surged by 26.6 percent to P1.665 trillion from P1.315 trillion a year ago, due to higher maintenance spending and subsidy to government corporations mainly for Covid-19 measures and allotment and capital transfers to local government units (LGUs).
For May alone, infrastructure spending plummeted by 36.7 percent to P38.9 billion from P61.5 billion in the same month last year “resulting from the stoppage of construction activities due to the extended implementation of the ECQ [enhanced community quarantine] for most part of Luzon and key areas in the Visayas regions.”
Month-on-month, infrastructure spending for May was also down by 3 percent from P40.1 billion posted in April this year.
Meanwhile, total state spending for May rose by 12.4 percent to P353.6 billion from P314.7 billion in the same month in 2019 owing to the increased spending on subsidy to government corporations, including the Social Security System for the P51-billion Small Business Wage Subsidy Program, maintenance expenditures, personnel services, and allotment and capital transfers to LGUs due to their higher shares of internal revenue collections and annual block grant of the Bangsamoro Autonomous Region in Muslim Mindanao, among others.
However, overall state spending for May fell by 23.4 percent from P461.7 billion in April.
With the easing of community quarantine measures in several areas, the DBM said infrastructure activities are ongoing, with both the Department of Public Works and Highways and the Department of Transportation vowing to fast-track construction works despite the onset of the rainy season.
More releases
It also expects more releases in the coming months as agencies are seen to submit special budget requests in line with their implementation of programs and projects for the second half of the year.
For June alone, it said some P45.4 billion was released based on the list of Special Allotment Release Orders. This amount included big-ticket items, such as releases for the conversion of national government advances into subsidy for the National Food Authority (P30.7 billion), Emergency Repatriation Program of the Overseas Workers Welfare Administration (P5 billion), releases for the Rice Competitiveness Enhancement Fund (RCEF) under the Philippine Rice Research Institute (P3 billion), and Revised Armed Forces of the Philippines Modernization Program (P2.4 billion).
According to the DBM, the remaining balance from the P4.1-trillion obligation program for the year is P364 billion or 8.9 percent of the program.
“Maintenance expenditures, specifically health- and social-related, remain to be the key drivers of spending growth for the succeeding months as the government continues to address the Covid-19 emergency,” it said.
Image credits: Roy Domingo
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