Early procurement boosts public infra spending

Public spending on infrastructure jumped by nearly 20 percent in the first half of the year, driven by the “early procurement” system that enabled agencies like the Department of Public Works and Highways (DPWH) to start their projects before the rainy season.

For the first semester, capital outlays amounted to P735.9 billion, up by 19.9 percent from last year’s P613.8 billion, data from the Department of Budget and Management (DBM) showed on Wednesday. The amount spent was also 8.6 percent above the target of P677.7 billion.

In June alone, capital outlays rose by 12 percent to P158.9 billion.

“As early as January, we already provide them their allotments and most of the DPWH projects are already undergoing early procurement.. short of award. By January, they already implemented most of the projects,” Budget Secretary Amenah Pangandaman said during a discussion.

Early procurement means that once an agency submits its budget to Congress under the National Action Plan, some of its projects can already be bid out but without awarding the contract. When the DBM releases the budget by Jan. 1 of the following year, the notice of award can already be given.

“This is critical for infra projects [started] in the January to June period. Because of climate change, it’s possible to construct more before the July to August wet season,” Pangandaman said in a separate interview with Inquirer.

Specifically, direct spending on infrastructure reached P139.7 billion in June, higher by 17 percent than last year.

Since the beginning of the year, outlays amounting to P611.8 billion directly went to infrastructure, up by 20.6 percent.

In a statement, the DBM said that the DPWH had been swift in completing its projects such as roads, bridge and multipurpose buildings, right-of-way claims for the previous years and ongoing bills for other road infrastructure projects funded using unprogrammed appropriations.

The DBM also noted the growth in spending due to construction and rehabilitation of justice halls throughout the country.

In June, P19.2 billion was allocated to towns, cities, and municipalities for local infrastructure development. However, this amount represented a 14.2-percent decrease from last year.

This brought the first half amount to P123.8 billion, 16.3 percent higher than last year.

The DBM recorded overall infrastructure spending, including subsidies to local government units and equity to state-owned corporations, amounting to P720.5 billion, higher by 18.4 percent.

This accounted for 5.7 percent of the country’s economic output compared with the 5.6 percent full-year target for this year and 5.3 percent ratio in the first half of last year.

The DBM also expects that infrastructure spending and maintenance, along with other operating expenses, will continue to drive government disbursements in the coming months.