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Low disbursements, agency weakness mar ‘BBB’ record

“If evaluated in terms of performance versus its target, the BBB program fails expectations. A comparison of the budget versus actual disbursements of infrastructure implementing agencies shows that actual expenditures are far below programmed expenditures due to institutional weaknesses,” Patalinghug said.
Build Build Build
A scale model of the Binondo Intramuros Bridge is seen at the 5th Inter-Agency IFP Forum: Final Project Review of the Working Committee for Forward Transition at the PICC Plenary Hall in Pasay City on Thursday, April 27, 2022.

LOW disbursements and other institutional weaknesses crippled the previous administration’s Build, Build, Build (BBB) program, according to a professor emeritus at the University of the Philippines (UP).

In a research submitted to the Office of the UP Diliman Chancellor for the Professor Emeritus Research Program, Epictetus E. Patalinghug said that while the previous administration did well in terms of increasing infrastructure spending, it fell short of its own targets.

Patalinghug said that on average, the percentage of national government disbursement over appropriations was only 75.7 percent during the 2017-2019 period. The actual infrastructure expenditures were also below target in terms of value and percent to GDP, except in 2017.

“If evaluated in terms of performance versus its target, the BBB program fails expectations. A comparison of the budget versus actual disbursements of infrastructure implementing agencies shows that actual expenditures are far below programmed expenditures due to institutional weaknesses,” Patalinghug said.

Patalinghug added that key infrastructure agencies, the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr), disbursed their budget below 40 percent and 30 percent, respectively, in the 2017 to 2018 period.

He noted that the Commission on Audit (COA) reported that for every P1,000 spent in the budget during the time, only P750 was obligated or committed while P255 was disbursed. This represented only a 30-percent ratio between the disbursed and obligated amounts.

The UP professor divided his analysis of the BBB in terms of railway projects; airport-related projects; and roads, bridges, highways and tollways.

Patalinghug said among the 15 rail projects that were examined, only two have been completed, the LRT-2 East Extension Project and the MRT-3 Rehabilitation Project.

He said the BBB railway portfolio is dominated by projects under construction, projects awarded, and projects still waiting for government approvals.

Meanwhile, Patalinghug said none of the 10 unsolicited Public Private Partnership (PPP) projects were completed during the 2016-2022 period.

Only San Miguel Corporation’s New Manila International Airport, he added, was able to secure the necessary regulatory approvals.

Nonetheless, Patalinghug said, the government’s performance in undertaking smaller-scale airport projects was better since four out of five were completed.

For roads and bridges, among the 12 selected BBB projects that he examined, five were completed. This indicates a 42 percent completion rate.

“The lessons that can be learned from the experiences of countries which embarked on ‘big push’ infrastructure programs are the expected gains from coordinated infrastructure programs can be smoothly attained if absorptive capacity exists [and] reaping the benefits of greater investments in infrastructure requires an improvement in investment efficiency,” Patalinghug said.

“Private participation in infrastructure can [also] increase efficiency and bring expertise but possible risks that can occur must be understood in order to determine the appropriate regulatory framework,” he added.

In the 2017-2021 period, Patalinghug said the previous administration spent P4.63 trillion or 4.7 percent of GDP. This is higher than the average of P1.98 trillion or 2.5 percent of GDP spent by the previous administration during the 2011-2016 period.

Apart from the BBB, the professor cited government data showing that in five years, the Duterte administration constructed 29,264 kilometers of roads; 5,950 bridges; 11,340 flood control projects; 150,149 classrooms; 214 airport projects; 222 evacuation centers; 450 seaport projects and 653 Covid-19 facilities.

Patalinghug cited a National Economic and Development Authority (Neda) report that the BBB program has created 580,000 and 620,000 direct and indirect employment in 2020 and 2021, respectively.

This, he said, has been the basis for observers from multilaterals such as the Asian Development Bank and even the survey results released by Pulse Asia that indicated the previous administration improved infrastructure in the country.

Image credits: Nonie Reyes



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