Infrastructure Spending Down In 2020
Spending on infrastructure went down in 2020.
According to the data provided by Budget Assistant Secretary Rolando U. Toledo, infrastructure expenses were at P681-billion, 22.7% lower as compared with the previous year.
State spending on these projects reached P276.1 billion and that infrastructure spending surpassed P225.5 billion.
Toledo said that data included the total spending of the government on infrastructure, including the infrastructure components of transfers to local government units and subsidies or equities to government-owned and -controlled corporations (GOCCs).
The realignment of funds last year because of the pandemic caused the government to slash the infrastructure funds. For this year, the budget is expected to reach P1.2 trillion or equal to 5.9% of GDP.
“With a multiplier of 2.27, meaning every peso spent creates another P1.27, some 1.7 million jobs can be created to accelerate the recovery. Timely implementation of infrastructure projects will have the biggest impact on our recovery prospects,” said Chua.
Emilio S. Neri, Jr., the lead economist at the Bank of the Philippine Islands (BPI), said that the underspending of the government may pose a downside risk to the 2021 rebound.
“With businesses still struggling, the lack of fiscal support and public construction may stall the recovery and dampen the demand for capital goods,” Neri said.
Oxford Economics said that quarantine restrictions should then be relaxed to allow infrastructure projects to continue.