Gov’t infra spending rises 6.3%

MANILA, Philippines - Government spending for infrastructure rose 6.3 percent to P237.3 billion in the first 11 months of 2014 with most of it going to reconstruction and rehabilitation efforts in communities devastated by Super Typhoon Yolanda.

This increased the state’s total disbursements for January to November 2014 to  P1.76 trillion, which was 5.1 more than what was spent a year earlier.

“This reflected the administration’s continued commitment to building and rehabilitating roads and bridges, as well as completing other infrastructure projects,” Budget Secretary Florencio Abad said.

Abad said the higher disbursement in November was consistent  with the October spending which climbed by 6.4 percent compared to the same 10-month period in 2013.

Spending performance for these two months was driven largely by subsidies to government-owned or controlled corporations (GOCCs), transfers to local government units (LGUs), and increases in maintenance and capital spending compared to the previous year.

In November alone, disbursements declined by 7.7 percent in the same month in 2013. 

“While the November report showed lower disbursements compared to the previous month’s performance, this can be attributed largely to better management of government’s lending, our debt, and subsidies to GOCCs. This reflects the National Government’s progress in keeping down costs that don’t involve crucial projects and programs,” Abad said.

While the decline was attributed to the slower utilization of Notices of Cash Allocation (NCAs) by agencies—driven by contractions in spending by the Department of Agriculture (DA), the Department of National Defense (DND), and the Department of Social Welfare and Development (DSWD)—a large part of this decrease was derived from spending less on non-NCA items including net lending, tax subsidies, and interest payments.

Non-NCA disbursements in November  2014 amounted reached P10.3 billion, down 27.5 percent from the previous year.

Abad expects the government’s disbursement performance to improve in the coming months as it continues to undertake reforms aimed at accelerating spending to further fuel the growth of the economy.

The Philippines aims to increase spending for infrastructure to at least five percent of gross domestic product or about $18 billion.