Infrastructure spending misses first-half target by 21%

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Metro Manila (CNN Philippines, August 1) — Infrastructure spending remained anemic as of end-June, with ₱311.4 billion budget releases made by the government remaining short of target, according to latest data from the Department of Budget and Management (DBM).

This was 20.8 percent lower than the government's target of spending ₱392.9 billion on infrastructure for the first semester. 

The first-half spending on infrastructure and other capital outlays was also 11.7 percent lower than the ₱352.7 billion released in the same period last year.

In all, only ₱1.59 trillion has been released for government expenditure purposes during the first six months, lower than the ₱1.72-trillion program planned for the period.

"This is largely due to the delayed implementation of various infrastructure projects following the late approval of the 2019 General Appropriations Act and the election ban," the DBM said in a statement.

Lawmakers were at a deadlock about supposed last-minute insertions and realignments when the spending plan was being finalized in Congress. President Rodrigo Duterte was only able to sign the budget bill into law on April 15. This left all new and continuing projects unfunded, effectively paralyzing the rollout of several items in the "Build, Build, Build" pipeline.

The budget delay has also been blamed for the disappointing 5.6 percent economic growth in the first quarter, a four-year low.

In June alone — two months after the budget passage — infrastructure spending was still 39.5 percent lower year-on-year. Some economists have said that second-quarter growth prospects could remain pale, with the ban on public works for 45 days running up to the May 13 polls also a hurdle.

Meanwhile, spending on salaries and pension payments of government workers rose by nearly a tenth to ₱503.3 billion as of end-June, reflecting the fresh pay hike for civilian as well as military personnel.

Fund transfers to local government units also rose by 9.3 percent to hit ₱230.2 billion, while subsidies — including conditional cash transfers and free college tuition — steadied versus last year, data showed.

The DBM said spending could finally pick up in the remaining months of 2019.

"It is expected that bulk of disbursements, especially on infrastructure and other capital outlays, will be heavily concentrated in the second semester of the year," the DBM said.

The DBM added that the Department of Public Works and Highways, which implements the major road and bridge construction and repairs, will pick up in the third and fourth quarters, barring weather disturbances and other bottlenecks.

The government is counting on the faster rollout of infrastructure projects to perk up economic activity, as it kept a 6-7 percent growth goal for the entire year.