By Karl Angelo N. Vidal, March 7 2019; Business World

Image Credit to AFP

NATIONAL GOVERNMENT infrastructure and other capital outlays exceeded the 2018 program, driven by road and bridge networks, flood control projects and military modernization among others, despite a drop in December, the Department of Budget and Management (DBM) reported on Wednesday.

In a national government disbursement performance report, the department said that infrastructure spending and other capital outlays surged 41.3% to P803.6 billion in 2018 from P234.9 billion the previous year, exceeding the P775.4-billion program for that year by P3.6% or P28.3 billion.

This despite the fact that infrastructure and other capital outlays fell 8.2% to P75.6 billion in December 2018 from P82.3 billion the past year.

The DBM attributed the pickup in full-year infrastructure disbursements in 2018 to various projects of the Department of Public Works and Highways (DPWH), the Department of Education (DepEd), the Department of Health (DoH) and the Department of National Defense (DND).

In particular, DPWH disbursements climbed 46% year-on-year to P538.2 billion. Projects included new roads and bridges, road widening, improvement and rehabilitation works, as well as flood control projects.

The DBM also cited acquisition by the Armed Forces of the Philippines of transport and combat equipment, as well as navigation and communication facilities as part of its modernization.

Construction and rehabilitation of school buildings and computerization program of the DepEd, as well as the construction and repair of health facilities by the DoH also contributed to the boost in spending.

“We are serious in closing the infrastructure gap, owing to decades of neglect on our roads, bridges, mass transport systems and all sorts of infrastructure,” former Budget Secretary Benjamin E. Diokno, who on Tuesday took the reins of the central bank, was quoted as saying in the statement.

“Build Build Build is well under way and we have delivered on our commitment to disburse at least five percent of our gross domestic product (GDP) for infrastructure.”

Infrastructure disbursements alone, excluding other capital outlays but including funding support for government-owned and -controlled firms and transfers to local government for infrastructure, totaled P886.2 billion in 2018, equivalent to 5.1% of GDP, and beating the P868.6-billion program or 5% of GDP.

The government has embarked on an P8-trillion infrastructure development program until 2022, when President Rodrigo R. Duterte ends his six-year term, in an effort to boost economic growth to 7-8% until then from a 6.3% annual average in 2010-2016.

Meanwhile, public service expenditures climbed to P987.2 billion in 2018 from the P808.4 billion a year ago due to higher base pay and benefits of state workers.

Maintenance and other operating expenditures grew by 12.9% to 525.6 billion from P465.4 billion in 2017, as a result of increased social service expenditures such as basic and tertiary education, health banner programs and conditional cash transfers.

Overall, the full-year national government disbursements were recorded at P3.408 trillion, up 20.7% from the P2.824 trillion in 2017. “For the first time since 2005”, disbursements “marginally exceeded” the program of P3.37 trillion set for 2018.

The government’s disbursement program for this year totals P3.824 trillion, 12.2% or P415.7 billion more than last year’s actual spending. “Spending for this year will continue to invest heavily in social services programs and public infrastructure to raise the 6.2% economic growth in 2018 and attain at least seven-percent economic growth over the medium term,” the DBM said.

The P3.757-trillion national budget is yet to be signed into law by Mr. Duterte, as Congress was able to finalize it only in mid-February. The government is operating on a re-enacted budget, leaving new programs unfunded. — Karl Angelo N. Vidal