Infra spending hits lowest level in Nov

Government spending for infrastructure dropped to a year-low in November last year even after state agencies were ordered to catch up on their expenses to boost economic growth.

Based on the latest national government disbursement performance report of the Department of Budget and Management (DBM), state infrastructure expenditure and other capital outlays slipped by almost 30 percent to just P56.7 in November from P80.2 billion in the same period in 2022.

This is the lowest infrastructure expense level recorded so far for 2023 and also the first time since April that the spending item fell below the P100-billion mark.

The decline in spending came even after the Marcos administration’s economic team moved to expedite its public spending, particularly on infrastructure projects, by directing agencies to put into action their catch-up plans.

The catch-up plan was implemented in the second semester of 2023 after gross domestic product (GDP) growth disappointed in the first half, largely due to the low budget utilization of various state agencies.

Government spending is around 20 percent of GDP.

According to the DBM, the decline in November was mainly due to the different timing of big-ticket disbursements in the Department of Public Works and Highways (DPWH), with the ongoing processing of payments for approved billings and disbursement vouchers for civil works, supplies and equipment as well as right-of-way claims.

The DBM said actual payments for these were expected to be taken up in December 2023 following the release of additional cash allocations during the month.

Similarly, constructive receipts of cash or those payments directly made by development partners for foreign-assisted projects were also lower sans the substantial outlays for various railway projects of the Department of Transportation (DOTr).

These include the Malolos-Clark Railway project and the North-South Commuter Railway project.

The DBM noted that the lower spending was partly offset by the payments for capital outlay projects under the Revised Armed Forces of the Philippines Modernization Program of the Department of National Defense.

For the 11-month period of 2023, nonetheless, infrastructure spending picked up by 18.5 percent to P1.02 trillion from P861.8 billion.

Meanwhile, overall government spending for November 2023 also decreased by nearly five percent to P433.6 billion from P455 billion the year prior.

Apart from infrastructure, combined allotment and capital transfers to local government units also fell by seven percent to P80.2 billion on lower national tax allotment.

The government likewise recorded lower maintenance and other operating expenses to P69.7 billion due to the timing of release for education and social assistance programs.

On the other hand, personnel services expenditures inched up by a measly 1.3 percent to P162.8 billion due to the implementation of the fourth tranche of salary standardization, as well as the release of year-end bonus of the Department of Education.

Interest payments surged by 86 percent to P48.5 billion due to coupon payments for global bonds and fixed rate Treasury bonds, as well as the impact of higher interest rates here and abroad.

Net lending also picked up to P4 billion, mostly on account of the payment of the National Food Authority for various short-term loans.