Infra spending down to P59.3B in August
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 21 Oct 2019 16:37:24 +0000
The delayed approval of this year’s national budget and the election ban on spending dragged state expenditure for infrastructure and capital outlay in August, the Department of Budget and Management (DBM) said on Monday.
In its latest disbursement report, the Budget department said infrastructure and capital spending dropped to P59.3 billion in August, 13.2-percent lower than the P68.4 billion in the same month last year.
It explained that the P9-billion fall was “due to the delays in the implementation of new projects which stemmed mainly from the late passage of the 2019 budget and the election ban.”
A dispute between the Senate and the House of Representatives over alleged insertions resulted in the four-and-a-half-month delay in the passage of this year’s budget. This forced the government to run on last year’s outlay, limiting it to spend for items detailed in the 2018 appropriations and not on programs and projects supposed to be implemented this year.
On top of the budget impasse, government spending was also banned from March to May because of the May 13 midterm elections.
Lower spending in August dragged the year-to-date tally by 11.8 percent to P446 billion.
The January-to-August figure put total national government spending — which includes expenditures for maintenance, personnel services, and subsidies — at P2.21 trillion, up 0.9 percent or P20.7 billion from the amount in the same period last year.
Sought for comment, Rizal Commercial Banking Corp. economist Michael Ricafort pointed out that the government’s catch up spending “would help accelerate infrastructure spending in the coming months and could even spill over into next year, thereby the benefits of pick up/faster economic/GDP (gross domestic product) growth could be deferred by then.”
The government’s catch-up plan set an infrastructure spending target of P792.97 billion for the second to fourth quarters after actual infrastructure spending reached P207.2 billion in the first three months of 2019.
For its part, the DBM noted that some of the big-ticket releases could drive the growth of government disbursements moving forward.
These include P29.8 billion for the requirements of health insurance premiums of senior citizens enrolled in the National Health Insurance
Program of the Philippine Health Insurance Corp.; P18.0 billion for the Unconditional Cash Transfer Program through the Land Bank of the Philippines as conduit; and P13.3 billion for the payment of right-of-way requirements of the Department of Transportation, it noted.
“For September 2019, higher disbursements are expected as agencies utilize their remaining NCAs (notice of cash allocation) before they lapse at the end of the quarter, and as they try to catch up with their respective spending plans,” the Budget department said.
It added initial data from Modified Disbursement System-Government Servicing Banks indicate disbursements grew by about 40 percent year-on-year.
“This hopefully signals a faster rate of spending for the remaining months to keep up with the P3,774.0 billion (P3.77 trillion) target for the year,” the DBM said.