Infra, capital spending jumps to P62B in May
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 08 Jul 2019 16:21:39 +0000
STATE infrastructure and capital spending rebounded in May from a month earlier, rising to P61.5 billion on the back of foreign-assisted public-works projects and military modernization.
In a report on Monday, the Department of Budget and Management (DBM) said the amount was a 5.9-percent increase from P58.1 billion in the same month last year.
“The increase is credited to disbursements for foreign-assisted infrastructure projects of the Department of Transportation and the Department of Public Works and Highways, as well as for capital outlay projects under the Armed Forces of the Philippines Modernization Program,” it explained.
While the May figure reversed April’s 5.9-percent contraction, it failed to boost the year-to-date tally, which dropped by 4.6 percent to P267.9 billion from P280.8 billion in January-to-May 2018.
In a comment, Rizal Commercial Banking Corp. economist Michael Ricafort said the year-on-year decline in the first five months of the year “may still reflect some spillover effects of the reenacted budget and delay in approval of the 2019 national budget from January to early April 2019, as well as some effects of the election ban on some government spending, including that for infrastructure.”
Going forward, the Budget department said it had begun processing the release of the second-semester cash allocations of agencies.
“This will facilitate budget execution and help agencies implement their catch-up plans for their respective programs, activities and projects (PAPs), and will hopefully accelerate the pace of government spending by the second semester of this year,” it added.
As of end-May, the remaining balance from the P3.661-trillion obligation program for this year amounted to P668.6 billion, or 18.3 percent.
This largely consists of unreleased allotments in Special Purpose Funds (P373.1 billion) and in agency-specific budgets (P294.4 billion).
“Releases from these balances are subject to the submission of [the] special budget request by agencies,” the DBM said.
According to the department, some P112.5 billion was released in June alone. This included big-ticket releases for programs and projects of the National Irrigation Administration amounting to P25 billion; pension adjustment under the Department of National Defense, P21.7 billion; and second-semester pension requirements of the Philippine National Police, P16.3 billion.
Over the weekend, banking giant HSBC said the government was likely to hit its revised infrastructure spending target this year.
It believed the government’s target to spend 5.2 percent of the country’s gross domestic product on infrastructure this year was “achievable.”
The target was previously set at 7.1 percent of GDP, equivalent to P1.359 trillion, but was lowered on account of budget issues in the first half of 2019.
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