Infra spending nearly doubled to P65.6 B in April—DBM

Infrastructure spending jumped by nearly double in April this year on the back of the Duterte administration’s ambitious “Build, Build, Build” program, the Department of Budget and Management (DBM) said yesterday.

The budget department reported that the government’s infrastructure expenditures and other capital outlays in April amounted to 165.6 billion, up by 96 percent compared with 133.5 billion in the same month in the previous year.

In a briefing, Budget Secretary Benjamin E. Diokno said the acceleration in infrastructure spending was owing to the implementation of various road projects by the Department of Public Works and Highways (DPWH).

Among the infrastructure projects cited by Diokno include the improvement, upgrading and widening of roads and bridges as well as payment of right-of-way claims.

Construction and improvement of access roads leading to declared tourism destinations, investment in flood control and drainage systems along with preventive maintenance projects also boosted infrastructure spending during the month, the budget chief said.

“We are keeping our foot on the gas pedal with regards to government spending. We will maintain this positive momentum for the rest of the year and virtually put an end to underspending,” Diokno said in a statement.

On capital outlays, Diokno said the government likewise spent for the acquisition of laboratory and IT equipment of state universities and colleges, as well as the construction of academic buildings and facilities in the University of the Philippines.

The construction of police stations and purchase of equipment under the capability enhancement program of the Department of the Interior and Local GovernmentPhilippine National Police also contributed to higher infrastructure spending in April, Diokno said.

In the four-months, the government’s total infrastructure and other capital outlays amounted to 1222.7 billion, higher by 47.5 percent compared with 1151 billion in the same period last year.

In 2017, the Duterte administration’s infrastructure spending surpassed its programmed expenditure level, increasing by 14.3 percent year-on-year to 1568.8 billion from 1493 billion.

Infrastructure spending last year was higher by 2.5 percent against the P696.6 billion target for 2017.

“The objective is to spend something like 18 trillion to 9 trillion in six years or the period of President Duterte,” Diokno said.

Meanwhile, the investment banking arm of the Metrobank Group, and the University of Asia & the Pacific said that the government’s robust infrastructure spending will push the country’s economy to grow by 7.0 percent to 8.0 percent this year.

Citing the first-quarter expenditure data, The Market Call, the capital markets research publication of First Metro Investment Corp., said that infrastructure spending and other capital outlays soared by 32.4 percent in March.

The construction of roads, police stations and rehabilitation of schools accounted for the strong outlay on infrastructure resulting in a 30 percent-plus growth on total government spending, which is seen to push economic expansion and hit the 7.0 percent to 8.0 percent target this year, the report said.

Robust expansion in national government expenditure – marking the third consecutive month of above 10 percent gains in 2018 – resulted in 27 percent growth to 1782 billion in the first quarter of the year.

Actual spending in the first quarter is 3.5 percent or 126.2 billion higher than the programmed spending, suggesting that various reforms and programs are being implemented, The Market Call noted.

“We can see that the government’s infrastructure program is full steam ahead. Not only has the DPWH managed to expand work by double digit pace in the 11 of the last 12 quarters, a new acceleration has also been evident in the last four quarters. From 12 percent growth in the second quarter of 2017 (year-on-year), this has reached 25.1 percent in the first quarter of 2018,” First Metro President Rabboni Francis Arjonillo said.

To illustrate, The Market Call said that in 2012, DPWH had a budget of only $2.5 billion but this year the budget was raised to $13 billion, more than five times the amount six years ago.

It further said that it took a sample of DPWH’s 35 projects valued at 122.6 billion which started in late 2016-2017 and scheduled to be completed in late 2018. Based on the latest report of DPWH, on average these projects are 67 percent complete, suggesting they are on track and will finish as scheduled.

In an interview with a project proponent, even Public-Private Partnership (PPP) projects are moving faster under the Duterte administration, the report said.

The new Right of Way Act (ROWA, RA 10752) and implementing regulations appear to convince land owners that this ROWA system is more just and, thus, less resort to expropriations would be needed.

Also with this new ROWA Act, the law provides that the government only needs to put 50 percent of the expropriation money in escrow (a last resort), and the project can proceed.

“Clearly, the national government is moving fast to enable it to accomplish a substantial part of its Build, Build, Build program,” Arjonillo added.