Government jacks up infrastructure spending to P1.2 trillion in 2023

MANILA, Philippines — The government jacked up its infrastructure spending last year, hitting P1.2 trillion and effectively surpassing its programmed allocation on the back of faster disbursements for major transport and road projects, according to the Department of Budget and Management.

Based on the latest national government disbursement performance report of the DBM, state infrastructure expenditure and other capital outlays picked up by nearly 20 percent to P1.2 trillion in 2023 from P1.02 trillion in 2022.

Infrastructure expenditures accounted for about 22 percent of the record P5.34 trillion government disbursements last year.

Last year’s infrastructure spending also surpassed the P1.04 trillion program by P167.7 billion or 16.2 percent due to the faster disbursements of some agencies, particularly the Department of Public Works and Highways (DPWH).

Total infrastructure spending was equivalent to 5.8 percent of the country’s gross domestic product (GDP).

This was the same level in 2022 but was above the 5.3-percent target set by the government for last year.

According to the DBM, the expansion in infrastructure and other capital outlays was due to the robust performance of the DPWH amid their higher target disbursement rate, constant monitoring of project accomplishments and the expedited processing and payment of accounts payables.

It also attributed the higher infrastructure spending to the direct payments made by development partners for foreign-assisted rail transport projects of the Department of Transportation (DOTr), including the Malolos-Clark Railway, Metro Manila Subway and the North-South Commuter Railway projects.

Direct payments made by foreign creditors for DOTr’s foreign-assisted infrastructure projects reached P71.7 billion in 2023, up from P43.1 billion in 2022.

For 2024, total infrastructure disbursements are planned to be at least 5.2 percent of GDP, in line with the five to six percent target under the medium-term fiscal framework of the Marcos administration.

On the other hand, overall government spending in 2023 reached P5.34 trillion, up 3.4 percent on a yearly basis.

Broken down, personnel services expenditures went up by 4.2 percent to P1.44 trillion following the implementation of the fourth tranche of the salary standardization law, retirement and terminal leave benefits in various agencies and additional filled positions.

The government also recorded higher maintenance and other operating expenses at P916.6 billion due to benefits and allowances of healthcare workers and financial assistance for rice farmers.

Interest payments likewise increased by 25 percent to P628.3 billion due to coupon repayment of local and global bonds, new loan availment, foreign exchange fluctuations and higher interest rates.

On the other hand, combined allotment and capital transfers to local government units declined by 16 percent to P926.1 billion on lower tax allotments due to the Mandanas Ruling.

A decrease in government spending was similarly noted in subsidy support to government corporations, which went down to P163.5 billion especially for the health sector.