Infrastructure spending slips to P109 billion in August

MANILA, Philippines — The Marcos administration recorded a lower infrastructure spending in August, declining for the first time in nine months, amid billing delays and adjustments in the project timelines.

The latest national government disbursement performance report of the Department of Budget and Management (DBM) showed that state infrastructure expenditure and other capital outlays declined by 11 percent to P108.6 billion in August from P122.1 billion in the same period last year.

This is the first time in nine months that infrastructure spending recorded a decline or since the 29.4 percent contraction in November 2023.

According to the DBM, the lower infrastructure spending was due to lesser disbursements recorded in the Department of Public Works and Highways (DPWH).

In particular, DPWH has P22 billion in outstanding checks as of end-August, higher than the P17 billion in the same period in 2023.

These outstanding checks represented payments for progress billings, completed infrastructure works and activities, which were not yet encashed by contractors.

The DBM also noted that there were delays in the submission of billing documents by contractors, which affected the timelines for the processing and release of payments for ongoing projects.

The lower spending was likewise attributed to adverse weather conditions, which slowed down project implementation, as well as adjustments in project timelines, as some major infrastructure projects encountered delays or were rescheduled.

Similarly, capital expenditures were down year-on-year without the big-ticket releases for local counterpart funds for the various foreign-assisted projects of the Department of Transportation (DOTr).

For the eight-month period, infrastructure spending picked up by 14 percent to P845.3 billion from P740.3 billion.

Further, overall government spending for August also declined by nearly a percentage to P440.5 billion from P443.6 billion a year ago.

Apart from infrastructure, personnel services expenditures decreased by 1.4 percent to P108.1 billion due to the timing of releases for the performance-based bonus of qualified employees of the Department of Education.

A decrease in government spending was similarly noted in subsidy support to government corporations, which dropped by 52 percent to P9.1 billion due to the schedule of releases to the Philippine Health Insurance Corp. (PhilHealth) considering its current financial position and substantial cash holdings.

There were no significant releases to PhilHealth as of end-August. In comparison, some P50.6 billion was disbursed to the state insurer in the same period in 2023.

On the other hand, combined allotment and capital transfers to local government units rose by almost 10 percent to P82.5 billion on higher national tax allotment and annual block grant.

The government also recorded higher maintenance and other operating expenses to P77.3 billion due to larger disbursements by the Department of Health (DOH) and the Department of Labor and Employment.

Interest payments also increased by 23.7 percent to P52.8 billion due to coupon payments for retail and fixed-rate Treasury bonds, as well as the impact of foreign exchange fluctuations.