8-month state infrastructure spending dips 11.5% to P394.5 billion

STATE infrastructure spending from January to August plunged by 11.5 percent year-on-year or P51.4 billion due to “moderated implementation” of construction activities amid the Covid-19 pandemic.

The Department of Budget and Management (DBM) said government spending on infrastructure for the eight-month period dropped to P394.5 billion from P445.9 billion in the same period in 2019.

Despite this, overall government spending as of end-August grew by 20.8 percent to P2.672 trillion from last year’s P2.212 trillion due to higher maintenance spending and subsidy support to government corporations mainly for Covid-19 measures, and allotment and capital transfers to local government units as a result of one-time Covid-19 Bayanihan grants and the releases of the annual block grant to the Bangsamoro Autonomous Region in Muslim Mindanao.

“The recorded growth for the said expense items, however, was slightly tempered by lower infrastructure and other capital outlays, and net lending. Infrastructure spending was lower year-on-year due to the payment of prior years’ accounts payables in the same period last year, and the moderated implementation of construction activities as a result of the lockdowns and restrictions brought about by the pandemic,” the DBM said in its latest report on national government disbursement performance.

This, as the government also suffered a 25.4-percent decline in state infrastructure spending for the month of August to P44.3 billion from P59.3 billion a year ago.

According to the DBM, this was mainly because of the “unintended delays in construction activities as a result of the rainy season and the implementation of the two-week modified enhanced community quarantine in the National Capital Region and the nearby regions.”

Lower infrastructure spending and subsidy support to government corporations for the month partially offset the increases in maintenance spending, combined allotment and capital transfers to local government units, personnel services and debt-related expenses and tax subsidies. As a result, overall state spending for August only inched up by 0.4 percent to P283.3 billion from P282.2 billion in the same month last year.

For the rest of the year, the DBM expects state infrastructure spending to “remain muted” with the discontinuance of some capital outlay projects which can no longer be implemented or completed due to the pandemic in line with Republic Act 11469, or the Bayanihan to Heal As One Act.

“Construction works have also been slowed down by the lockdowns for most of the second quarter, the restrictions following health and safety protocols, as well as the weather conditions in various parts of the country. Nonetheless, both the Department of Public Works and Highways and the Department of Transportation remain committed to accelerate implementation and make most of the remaining months of the year to complete or partially complete priority projects,” it said.

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Article and Photo originally posted by Business Mirror last October 13, 2020 and written by Bernadette D. Nicolas.