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Infrastructure spending exceeds first-half target


LOOSER quarantine restrictions that allowed construction activities to resume helped the government surpass its infrastructure spending target by nearly 2% in the first half of the year.

Data from the Department of Budget and Management (DBM) showed infrastructure and other capital outlays reached P426.6 billion between January and June, exceeding its P420-billion goal by 1.7%. Year on year, infrastructure spending surged 43% from P298 billion previously.

“Infrastructure and other capital outlays slightly exceeded the P419.6-billion program with the settlement of accounts payables and faster implementation of infrastructure activities of the DPWH (Department of Public Works and Highways) amid the looser community quarantine restrictions,” DBM said.

The government imposed stricter quarantine measures in Metro Manila and nearby provinces starting late March as coronavirus disease 2019 (COVID-19) cases spiked. Restrictions have gradually been eased since May, with more economic activities, including construction, allowed to resume as long as minimum health standards are observed.

In June alone, infrastructure spending rose by 50.4% to P94.4 billion from P62.8 billion a year ago, and by 20% from the P78.9 billion recorded in May.

DBM attributed the higher spending to DPWH’s infrastructure program to construct and repair roads, bridges and flood-control systems, as well as the Transportation department’s sustained rollout of various foreign-assisted projects.

Spending for the projects under the Armed Forces of the Philippines’ modernization program and the computerization program of the Education department also buoyed spending that month.

In the second quarter, infrastructure spending jumped by 63% to P231.4 billion from P142 billion in the same period last year. This also exceeded the P224.4-billion target by 3%.

Above-target spending on infrastructure should be a “good sign” for the economy as implementing agencies take advantage of good weather to fast-track construction works, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said via e-mail on Tuesday.

“We expect a faster rollout [moving forward] because of the coming election, the subsequent election bans on rollout of infrastructure projects, and the near end of this current administration. It is expected that all programmed spending may be pushed hard, and this will be favorable to economic growth for (the second half of 2021),” Mr. Asuncion said.

For the DBM, government spending should recover in the remaining months of 2021, since the slower disbursements in the first six months were only due to the pending request of subsidy release and outstanding checks.

“Disbursements will also be supported by the implementation of agency catch-up plans, particularly for those agencies which experienced implementation delays. The DBM is closely coordinating with the concerned departments/agencies for the submission and implementation of their catch-up plans,” it said.

The government has set a P1.02-trillion spending plan for infrastructure this year.

For the remaining months, it plans to spend P229.54 billion on infrastructure this quarter and another P221.6 billion in the fourth quarter. — Beatrice M. Laforga

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