Infrastructure spending in the Philippines down in February
The amount spent by the Philippine government to build infrastructure declined in February, a month before the enhanced community quarantine (ECQ) was imposed and public construction activities were put to a halt.
The latest Department of Budget and Management (DBM) data showed that disbursements on infrastructure and other capital outlays declined 4.7 per cent to 45.6 billion pesos ($900 million) in February from 50.3 billion a year ago.
February infrastructure spending was also 5.5 per cent lower than the 48.3 billion pesos in January.
Between January and February, expenditures on infrastructure and other capital outlays dropped by a faster 20.7 per cent to 93.9 billion pesos from 118.4 billion during the first two months of last year.
In a report, the DBM said: “The decrease is mainly attributed to the base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior years’ accounts payable for completed projects of the Department of Public Works and Highways [DPWH].
“Prior years’ accounts payable of the DPWH for its capital outlays for the first two months of 2020 amounted to 35.2 billion pesos, down from the 82.2 billion recorded for the same period last year.
“This decline was partly offset by the increase in the DPWH current year accounts payable [nearly 13 billion pesos year-on-year), payments for completed projects under the revised Armed Forces of the Philippines modernisation programme of the Department of National Defence and encashment of check floats,” said the DBM.
During the ECQ which started in mid-March, the Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) did not allow implementing agencies to continue construction of big-ticket infrastructure projects even as there was a lull in other economic activities during the lockdown period.
The Duterte Cabinet’s infrastructure team had asked the IATF-EID to exempt projects such as the North Luzon Expressway-South Luzon Expressway Skyway Stage 3, the Light Rail Transit to Cavite, and the rehabilitation of the Metro Rail Transit-3 to take advantage of the lack of passenger and commuter traffic during the lockdown.
Presidential adviser for flagship programmes and projects Secretary Vivencio B Dizon previously told Philippine Daily Inquirer that they will again seek exemption.
“But, we must impose very stringent measures to ensure safety and health protocols similar to what we did during the construction of the quarantine facilities”, he said, referring to the ongoing conversion of sports and convention facilities in Metro Manila and New Clark City in order to decongest hospitals.
Moving forward, the DBM expects total disbursements during the month of March and for the entire first quarter to increase year-on-year.
However, they “will likely be lower than the programme with the temporary delays in programme/project implementation as a result of the imposition of the ECQ due to the Covid-19 pandemic.
“It must be noted that with the enactment of Republic Act (RA) No 11469 or the Bayanihan to Heal as One Act on March 24, existing programmes, activities, and projects of the government will be reprioritised, reprogrammed, and realigned to the extent possible to augment the provision for priority health and social protection-related programmes and other measures intended to contain the Covid-19 emergency and mitigate its impact to the economy.
“Consequently, disbursements for the next few months are expected to increase with the purchase of medical supplies and equipment of the Department of Health for the Covid-19 response, release of cash subsidies to families and sectors affected by the ECQ such as the Department of Social Welfare and Development’s social amelioration programme, the Department of Labour and Employment’s Covid-19 adjustment measures programme, and the one-time grant of financial assistance to local government units equivalent to one month of their internal revenue allotment.
“Meanwhile, spending for rest of the year will continue to be driven largely by the implementation of Covid-19 related programmes, activities and projects, as well as other measures or strategies identified and recommended by the IATF-EID technical working group on anticipatory and forward planning on how to move forward with the ‘new normal’ situation given the pandemic,” said the DBM.