Infra, capital spending dips to P59.7B in March

STATE infrastructure and capital spending fell to P59.7 billion in March on account of the limitations of the reenacted budget the government was forced to operate on early this year, according to the Department of Budget and Management (DBM).

In a statement over the weekend, the Budget department said the amount was a 5.7-percent decrease from P63.4 billion in the same month in 2018, even as first-quarter spending rose by 13.4 percent year-on-year to P178.1 billion.

According to DBM, the Department of Public Works and Highways was a major spender in the month, disbursing P11.7 billion to pay for the accounts payables of previous years for completed roads, bridges and school buildings. This figure was a 42.7-percent increase from 2018’s.

DBM traced the March spending drop to a significant decline in the capital expenditures recorded in some agencies, such as the Department of Interior and Local Government (DILG) and the Department of Education.

“The said agencies were unable to implement new CO (capital outlay) projects, such as the construction of police stations, purchase of equipment under the Capability Enhancement Program of [the] DILG, and repair and rehabilitation of school buildings due to limitations in [the] release of funds under the reenacted budget,” it said.

A dispute between the Senate and the House of Representatives over alleged insertions resulted in the delay of the passage of the 2019 national budget. This forced the government to run on last year’s budget, limiting it to spend for items detailed in the 2018 outlay and not on programs and projects supposed to be implemented this year.
President Rodrigo Duterte signed the 2019 budget on April 15.

The January-to-March figure put total national government spending — which include expenditures for maintenance, personnel services and subsidies — at P778 billion for the period, up 0.8 percent or P6 billion from the amount in the same period last year.

Outlook

Despite the decline, the Budget department still expects government spending to normalize in the coming months, especially after the election ban, following the signing of the new budget.

Although the President vetoed some P95.4 billion in DPWH allocations, the total P3.661-trillion budget for 2019 is still higher by 10.1 percent or P335.7 billion, compared to the cash-based equivalent of the 2018 budget of P3.326 trillion, it added.

DBM noted that a preliminary analysis of the impact of the direct veto suggests that the effect could be minimal, since the vetoed items refer to local infrastructure projects introduced after the bicameral approval of the 2019 General Appropriations Bills, not the national government’s flagship infrastructure projects.

“While in general it could still result to lower disbursements, the reduction may partly be offset by payables from prior years’ infrastructure projects… changes in the appropriations of non-DPWH projects, and potential payables from continuing appropriations and unobligated allotments due to the extension of the validity of the 2018 appropriations for MOOE (maintenance and other operating expenditure) and CO,” it said.

The department also said personnel services expenditures were expected to increase starting last month, after Mr. Duterte issued on March 15 Executive Order (EO) 76, which identifies the funding source for the implementation of the fourth tranche of the compensation adjustment for civilian personnel pending the enactment of the 2019 budget.

Subsequently, the department issued National Budget Circular 575 dated March 25 to prescribe the guidelines for this tranche’s implementation, it added.
“It also provides for the charging of the requirements of the compensation adjustment against any available appropriations under the 2018 Budget, as reenacted, pursuant to EO No. 76,” it added.

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