Govt infra spending plunges in Jan-Oct
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Fri, 29 Nov 2019 16:14:09 +0000
STATE spending for infrastructure and capital outlay dropped in the first 10 months of 2019, according to the country’s economic managers, who are still confident that the government would hit its full-year disbursement targets.
The government’s Economic Development Cluster, through Finance Secretary Carlos Dominguez 3rd, announced that infrastructure and capital spending reached P628.5 billion from January to October.
“This is 73 percent of the 2019 full-year disbursement program of P859.5 billion, but 5.5 percent lower than the actual disbursements for the same period in 2018,” Dominguez told reporters on Thursday.
Infrastructure and capital spending during the same period in 2018 reached P665.1 billion.
The latest data shows that the government spent P82.2 billion on infrastructure and capital outlay in October alone, 12.92 percent lower than P94.4 billion a year ago.
“The contraction recorded in the disbursements for infrastructure and capital outlays were mainly due to the delay of the passage of the 2019 national budget and election ban,” Dominguez explained.
A dispute between the Senate and the House of Representatives over alleged insertions resulted in the four-and-a-half-month delay in the passage of this year’s budget. This forced the government to run on last year’s outlay, limiting it to spend for items detailed in the 2018 appropriations and not on programs and projects supposed to be implemented this year.
On top of the budget impasse, government spending was also banned from March to May because of the May 13 midterm elections.
Sought for comments, analysts from Union Bank of the Philippines Inc. and Rizal Commercial Banking Corp. (RCBC) said the latest figures reflected the absorptive capacity of government agencies.
“The delayed budget has really made a huge impact on spending this 2019, and even though government will be able to disburse all the allotment for infrastructure development this year, the absorptive capacity of government agencies historically has always been a big challenge,” Union Bank chief economist Ruben Carlo Asuncion said.
RCBC economist Michael Ricafort said the latest data reflected “some government underspending/underutilization of the budget and may also reflect the leeway needed for further catch-up on government spending on infrastructure especially for November–December 2019 to make up for the slower economic/GDP (gross domestic product) growth in the earlier part of 2019.”
The 10-month figure put the total national government spending — which includes expenditures for maintenance, personnel services and subsidies — at P2.93 trillion, up 5.05 percent or P141.3 billion from the amount in the same period last year.
Dominguez noted that this was 5.1 percent higher than the actual disbursements for the same period in 2018.
With this, the government needs to disburse P832 billion or 22 percent for the remaining two months of the year to attain its target disbursement of P3.77 trillion in 2019, he said.
“Based on the updates from our main infrastructure agencies, we are confident that we are going to hit our spending target for this year,” the Finance chief claimed.
In particular, he said that the Department of Public Works and Highways has, so far, disbursed 69 percent of its total commitment this year, totaling P503.4 billion.
The Department of Transportation’s (DoTr) actual disbursements reached P46.82 billion for the period January to November 28, Dominguez added.
“This represents 57 percent of its disbursement commitment for 2019 — the highest rate ever achieved by the agency in terms of actual disbursements, according to the report of DoTr Secretary Art Tugade,” he said.
Besides the infrastructure-focus agencies, the Cabinet official added that the other big spending departments, such as the Department of Education and Department of Social Welfare and Development, also committed to accelerate their disbursements in the remaining two months of the year.
“We likewise accelerated the distribution of the government’s conditional cash grants, bringing palpable economic relief to its recipients,” he said.
As of end September, the Department of Social Welfare and Development has provided conditional cash grants to 3.88 million beneficiaries, representing 93.21 percent of the 4.16 million target beneficiaries for this year.
With all these, he said the government remains optimistic that the economy will expand at a higher clip over the remaining two months of 2019 as the government continues to accelerate the implementation of the “Build, Build, Build” program and human capital development projects to make up for underspending earlier this year as a result of a reenacted budget.
“Overall, we remain on track to reach our GDP growth target of 6 to 7 percent in 2019,” the Finance secretary concluded.