August infra spending still down

National Government disbursements reached P282.2 billion in August 2019, increasing by 8.8 percent year-on-year.

The Department of Budget and Management headquarters in Manila. The agency said the government is still reeling from the fallout of the delayed passage of the 2019 passage as it reported a decline in infrastructure and capital outlays during the month of August.

The government’s promise to boost its disbursement activities in the second half of the year fell short of the intent, the spending data in August showing otherwise, Department of Budget and Management (DBM) bared Monday show.

“Infrastructure and capital outlays (in August) were lower by P9 billion year-on-year to end up at P59.3 billion,” the DBM said.

The spending numbers proved lower by 21.1 percent than the P75.2 billion disbursement in July and heightens the likelihood that overall growth, measured as the gross domestic product (GDP), end the year significantly lower than target.

On a cumulative basis, infrastructure and capital outlays stood at only P446 billion, an 11.8 percent or P59.6 billion drop from P505.6 billion registered in the same period a year ago.

According to the DBM, this development may be traced to the election ban and to the delayed passage of the 2019 budget, both of which prolonged the implementation of new projects.

Socioeconomic Planning Secretary Ernesto Pernia had said achieving the government’s 6 to 7 percent GDP target remains possible on the basis of the “current performance of the private sector.”

Total national government (NG) disbursements show improvement both for the month of August and year-to-date figures.

“National Government disbursements reached P282.2 billion in August 2019, increasing by 8.8 percent year-on-year,” the agency said.

“This positive growth rate buoyed government spending for the first eight months by 0.9 percent to reach P2.21 trillion, improving from the 0.1 percent contraction recorded as of end-July 2019,” the DBM quickly added.

For the remaining four months of the year, the DBM reported programmed spending totaling P316.2 billion or 8.6 percent of the total P3.66 trillion obligation spending.

For September, the agency said an uptick in infrastructure spending may be expected given large sum releases for agencies such as the Department of Transportation (DoTr).

“Based on the preliminary report of allotment releases, some P145.1 billion worth of allotments have been issued in September 2019. Some of the big-ticket releases, which could drive the growth of disbursements, include the 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 (DoTr),” it said.

“For September 2019, higher disbursements are expected as agencies utilize their remaining NCA (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 DBM added.