Government infra spending drops 57% in April

MANILA, Philippines — Public spending on infrastructure declined significantly last April due to the delay in the passage of the 2019 budget along with the election ban on public works, the Department of Budget and Management (DBM) said yesterday.

According to the latest disbursement performance report of the DBM, infrastructure and other capital expenditures last April dropped by 56.9 percent to P28.3 billion from P65.6 billion in the same period last year.

This brought the government’s infrastructure spending in the first four months of the year to P206.4 billion, down 7.3 percent from the P222.7 billion spent in the same period last year.

The DBM said the slowdown was a result of the delay in the approval of the 2019 General Appropriations Act (GAA) and the election ban on the implementation of public works, which prevented the government from pursuing new projects.  

 “Although infrastructure spending increased for the first quarter of 2019 due to the payment of prior years’ accounts payables for completed infrastructure projects, disbursements in April 2019 were lower year-on-year as some infrastructure projects were not started following the late budget approval and election ban,” the agency said.

Including equities and capital transfer to local government units, the government’s capital outlays in April amounted to P37.9 billion, 58.4 percent lower than the P91.1 billion posted in the same month last year. 

President Duterte was only able to sign Republic Act 11260 or the 2019 GAA on April 15 due to disagreements between the House of Representatives and the Senate over budget insertions. This forced the government to operate on a reenacted 2018 budget in the first quarter of the year.

Along with the election ban, this caused lower government disbursements for the month of April, which reached P221.8 billion or 15.1 percent down from last year’s level of P261.2 billion.

From January to April 2019, overall expenditures contracted by 3.2 percent to P999.8 billion from P1.033 trillion in the same period in 2018.

Economic managers estimate that underspending reached P1 billion a day, or about P90 billion in the first quarter, dragging economic growth to a four-year low of 5.6 percent.

To make up for this, the Cabinet’s economic cluster formulated a spending catch-up plan for the rest of the year. Economic managers said the plan would help the government meet this year’s spending target of P3.774 trillion, and gross domestic product (GDP) growth target ranging from six to seven percent.  

Meanwhile, the DBM said in a separate statement that it has released P2.607 trillion of the 2019 national budget as of end-May 31. The DBM said this is equivalent to 79.6 percent of the P3.276 trillion net program for fiscal year 2019, with a remaining balance of P668.6 billion.

Releases to departments reached P1.515 trillion, which accounts for 83.7 percent of the P1.81 trillion net program for line agencies.

Allotment releases from Special Purpose Funds (SPFs) also amounted to P21.1 billion, while releases from automatic appropriations amounted to P1.052 trillion.

Other releases, such as continuing appropriations from last year’s budget, unprogrammed appropriations, and other automatic appropriations reached P18.46 billion.

“Moving forward, the DBM will continue the speedy yet prudent release of funds to accomplish the programs, activities, and projects of government agencies. Efficient budget releases will ensure that public resources, including the money paid by taxpayers, will be channeled to interventions that alleviate poverty, create jobs, and boost the country’s overall development,” the agency said.