Infrastructure spending jumps in November

Infrastructure spending increased 49% in November, driven by road construction and repair projects, data from the Department of Budget and Management (DBM) showed.

Spending on infrastructure and other capital outlays rose by 49% to P60 billion in November, but slipped by 1.5% from a month earlier.

The year-on-year increase can be attributed to works on roads, bridges, flood mitigation structures and drainage systems, along with the construction of multi-purpose buildings, DBM said.

“The settlement of accounts payable of the Department of Health for various capital outlay projects under its Health Facilities Enhancement Program” also drove up spending, it added.

Road network and rail transport projects done with foreign aid contributed to higher spending, DBM added.

In the 11 months to November, infrastructure and capital outlays spending reached P762.4 billion, or 38.9% higher than the P548.8 billion spent in the same period in 2020.

Economic managers previously said infrastructure spending for 2021 could hit P1.095 trillion, higher than the P1.019 trillion it had programmed and accounting for 5.6% of economic output

“The latest year-on-year increase in infrastructure spending would reflect the rush to complete various government projects, including those under the Build, Build, Build program, in preparation for the election season,” said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

He added in a Viber message that the shift to the alert level system for lockdowns, instead of widespread restrictions, reopened the economy and sped up infrastructure spending.

The ban on public works starts 45 days before general elections, or from March 25 to May 8, 2022. The law, which also prohibits social welfare dole-outs during the period, seeks to prevent politicians from using state resources for their election campaign.

The alert level system was first piloted in Metro Manila in September 2021, under the strictest restrictions. The lockdown in the region was eased to the more relaxed alert level 2 by November as the number of coronavirus disease 2019 infections declined.

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The article was originally published in Business World and written by Jenina P Ibañez.