Gov’t infra spending plunges 40.1% in Oct
Government infrastructure spending opened the fourth quarter on a weak note, with the flood control scandal continuing to weigh on October disbursements and likely to drag on through the rest of the year.
In its latest disbursement report, the Department of Budget and Management (DBM) said government infrastructure and capital outlays in October plunged by 40.1 percent to P65.9 billion, down from P110 billion a year earlier.
This marked the fourth straight month of contraction, driven once again by lower disbursements of the Department of Public Works and Highways (DPWH) amid a widening probe into anomalous flood control projects.
In total, infrastructure spending from January to October fell 13.7 percent to P943 billion, from P1.1 trillion a year earlier.
“Infrastructure spending contracted since the onset of the flood control issues of the DPWH, which resulted in delays in the settlement of progress billings for its completed infrastructure projects,” the DBM said.
Disruptive weather, delays in contractors securing Bureau of Internal Revenue tax clearances for final payments, and stalled Philippine Contractors Accreditation Board license renewals were also key factors in the slump.
Total spending on infrastructure, including government corporation subsidies and local government (LGU) transfers, declined by 11.5 percent to P1.13 trillion.
Slump to persist in Q4
Looking ahead, the DBM said government infrastructure spending would likely remain under pressure for the rest of the fourth quarter.
“Lower infrastructure spending is expected to continue to weigh on overall government disbursements for the rest of the quarter, while the DPWH boosts its efforts to address corruption issues, ramp up ongoing investigations and validations, and resume construction activities,” the department said.
This is crucial going into the fourth-quarter gross domestic product, following a third-quarter slowdown that was largely attributed to a sharp contraction in spending, leading to missed economic targets.
The Marcos administration’s economic team had already signaled optimism that the economy is headed for a modest recovery in the final quarter, although it still appears unlikely to meet the full-year growth target of 5.5 to 6.5 percent.
Overall government disbursements, spending
The plunge in government infrastructure spending also weighed on October disbursements, which fell by 7.8 percent to P430.6 billion.
Even so, total government spending still grew 3.9 percent to P4.9 trillion as of end-October.
According to the DBM, spending on personal services, maintenance and other operating expenses and transfers to LGUs could help support government outlays in the fourth quarter.
The department added that financial aid to vulnerable populations and affected LGUs may also help boost household consumption and accelerate recovery.
