Infrastructure spending jumps 17%

State spending on infrastructure went up by 16.9% in September fueled by disbursements for finished transport projects, the Department of Budget and Management (DBM) said.

In the latest National Government disbursement report, spending on infrastructure and other capital outlays rose by PHP 19.8 billion to PHP 137.1 billion in September from PHP 117.3 billion in the same month last year.

Month on month, infrastructure spending went up by 26.24% from PHP 108.6 billion in August.

The DBM attributed the uptick in September disbursement to the payment for completed road network and bridge programs of the Department of Public Works and Highways (DPWH).

Higher disbursements were also made for various foreign-assisted projects of the Department of Transportation.

It also noted capital outlays for local counterpart requirements for implementing the Metro Manila Subway Project Phase 1, North-South Commuter Railway System, and the Davao Public Transport Modernization Project.

Funds were also used for the Department of National Defense’s (DND) Armed Forces of the Philippines modernization program, as well as the construction and repair of justice halls nationwide and implementation of the Department of Education’s computerization program.

In the January-to-September period, infrastructure spending rose by 14.6% to PHP 982.4 billion from PHP 857.6 billion in the same period in 2023.

“The robust spending growth for the period was largely credited… to infrastructure and other capital outlays with significant disbursements recorded in the DPWH for its banner infrastructure projects and the DND for its defense modernization projects,” the DBM said.

Overall infrastructure disbursements, which included transfers to local government units and subsidies to government-owned and -controlled corporations, went up by 12% to PHP 1.14 trillion as of end-September.

“This was equivalent to 6.1% of GDP (gross domestic product) vis-a-vis 5.9% outturn for the same period last year and the 5.6% full-year target this year,” it said.

Philip Arnold “Randy” P. Tuaño, dean of the Ateneo School of Government, said the increase in infrastructure spending is likely to be sustained in the short term.

“(The increase was) due to a significant balance from various budget sources that remain available for release, and the prioritization of large-scale transport projects such as the Metro Manila Subway,” Mr. Tuaño said in an e-mail over the weekend.

He also expects a surge in infrastructure spending given that the 2025 midterm election is five months away.

“It should first be noted that infrastructure spending year on year had increased, and this will further increase going into the 2025 national budget,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said in a Viber message. “This is the underlying reason for spending improvements this year.”

The government’s infrastructure program for this year is set at PHP 1.472 trillion, equivalent to 5.6% of GDP.

Mr. Ridon urged infrastructure agencies to improve absorptive capacity “particularly as 2025 is an election year in which the law mandates a suspension of project implementation for a specific period of time.”

“The challenges are that the absorption and burn rate by our key agencies, especially in infrastructure and agriculture, have been quite low,” former National Economic and Development Authority Secretary Cielito F. Habito, said at a conference at the University of the Philippines School of Economics on Friday.

Mr. Habito raised that there have been “questionable priorities” on allocations and utilization in some sectors.

“We allocate a lot of budget but it turns out it can’t be spent within the period it was meant to be used,” he said in mixed English and Filipino.

“This is a very important issue in our fiscal policy in general. It’s not so much the fiscal policy, but the implementation of the fiscal policies in that sense.”

Mr. Habito also mentioned the propensity of DPWH to “reblock” roads, calling it a “seemingly misplaced allocation of the budgets.”

He also said the government needs more public-private partnership types of projects given the shortage of public funds. — Aubrey Rose A. Inosante