Infrastructure and other capital spending rose sharply in July, the Budget department said, with government resources having been used for priority public works and health projects, armed forces modernization and right-of-way acquisitions.
Dat released during the weekend put spending at P48.4 billion during the month, up 25 percent compared to the P38.7 billion recorded a year earlier.
Year to date, expenditures grew by 11.1 percent to P297.5 billion from P267.7 billion in the corresponding period last year, the agency said.
In an assessment, the Budget department attributed the growth in capital expenditures to the implementation of flood control, road improvement and road widening projects by the Public Works department.
The rise was also traced to the acquisition of naval and air assets by the Defense department under the Armed Force of the Philippines modernization program.
Also noted were equipment purchases and other infrastructure outlays under the Health department’s Health Facilities Enhancement Program and payments for transport infrastructure projects such as right-of-way acquisition for the Southwest Intregrated Transport System project and completed civil works for the Light Rail Transit-2 East Extension project.
As this developed, Singapore-based bank DBS said the Philippines’ infrastructure push could allow the country to remain one of the fastest-growing Asian economies.
“We expect the country’s economic fundamentals to remain strong, with infrastructure at the forefront of growth. Save for some delays, infrastructure spending should lift the economic growth in Philippines in the longer run,” DBS said.
The Duterte government plans to spend P847 billion this year on infrastructure projects to meet an infrastructure spending-to-gross domestic product (GDP) ratio of 5.3 percent.
Under its “Build Build Build” program, the administration intends to spend P8 trillion to P9 trillion on infrastructure during its six-year term.
DBS noted that conglomerates were generally still bullish on the Philippine infrastructure story despite setbacks in the pace of government project rollouts.
The bank noted that investments made up some 28 percent to 30 percent of gross domestic product currently, up from about 20 percent to 22 percent in the preceding five-year period.
“Although investment growth eased to 9.4 percent year-on-year in second-quarter 2017, it is still a fairly strong print, and it is obvious that investment growth cannot be sustained at the 20 percent annual pace prior to the elections,” it noted.
With Philippines GDP growth running at 6.4 percent in the first half of the year, DBS said the result was one of the highest in the region and among emerging markets.
It said the Philippines was to likely remain the fastest-growing Association of Southeast Asian Nations economy over the next few years.