Gov’t hikes 2021 infra budget to P1.31 T

The Development Budget Coordination Committee (DBCC) has approved a higher infrastructure spending program for next year to accelerate Build Build Build (BBB) projects and help the economy recover from the coronavirus disease 2019 (COVID-19) crisis.

In a statement, the Department of Budget and Management (DBM) said the DBCC has set an infrastructure program of P1.131 trillion for 2021, which is equivalent to 5.3 percent of gross domestic product (GDP).

This is higher from the updated P775.1 billion (4.6 percent of GDP) infrastructure program for 2020.

According to the DBM, higher infrastructure investments would help generate employment, and contribute 0.9 percentage point to

GDP growth by next year.

“This upward push of the infrastructure program is expected to create some 140,000 to 220,000 additional jobs through direct and indirect employment,” the DBM said.

“With higher infrastructure investments, the country’s recovery from the COVID-19 pandemic can be better assured by generating more jobs in 2021, thus contributing a projected 0.9 percentage point increase to GDP growth to reach the range of eight to nine percent from the previous projected range of 7.1 to 8.1 percent,” it added.

The government’s infrastructure budget was initially set at P800.6 billion (4.3 percent of GDP), as approved by the DBCC last March 27.

However, DBM Assistant Secretary Rolando Toledo said this was slashed to P725.1 billion during the committee’s meeting last May 12. It was then revised again to P775.1 billion based on the updated DBCC approval on May 27.

The DBM said the reduction was due to the reallocation of the budget to health and social amelioration programs to address the impact of the COVID-19 pandemic.

Meanwhile, DBCC has pegged the 2021 cash budget at P4.335 trillion, which is equivalent to 20.2 percent of GDP.

This is 3.7 percent more than the P4.18 trillion budget it approved last May 12.

The inter-agency body also approved a budget deficit cap of 6.6 percent of GDP for next year, which is lower than the 8.4 percent revised ceiling this year. “This is in a bid to return to the government’s fiscal consolidation track which was derailed by the current crisis and to keep the government’s debt at fiscally responsible levels,” DBM said.

Government revenues are expected to reach P2.929 trillion next year (13.6 percent of GDP), 12.1 percent higher than the revised P2.61 trillion program this year, while the disbursement program is set at P 4.357 trillion, 4.4 percent higher than this year’s target of P4.175 trillion.

Earlier, DBM said the 2021 budget will need to be reviewed and reprioritized in light of the “new normal” environment brought about by the COVID-19 pandemic.

DBM said the government’s expenditure program for 2021 should