INFRASTRUCTURE spending posted a double-digit growth in September as disbursements for road projects, school buildings, health facilities, and defense surged, the Department of Budget and Management (DBM) reported Friday.
A Fitch-owned research firm said government spending is a crucial factor to Philippine economic growth next year.
The growth in infrastructure and other capital expenditures surged by 75 percent to P50.5 billion in September from P28.8 billion a year earlier.
The DBM cited the disbursements by the Department of Public Works and Highways for the preservation and maintenance of existing road assets; capital outlay projects of the Department of Education for school buildings and repair or rehabilitation of school facilities; equipment outlays and upgrade of health facilities in Department of Health hospitals; and acquisition of military equipment under the Armed Forces of the Philippines Modernization Program of the Department of National Defense.
The DBM said the spending in September lifted the nine-month infrastructure and other capital spending by 44.9 percent to P352 billion from P243 billion.
In a report released Friday, BMI Research said infrastructure spending by the government is one of the upside risks to its 2017 growth forecast.
“The economic growth performance will largely depend on the Duterte administration’s ability to cut through red tape and get infrastructure and investment projects going, as well as to reassure investors of the government’s commitment to maintain and improve the public-private partnership program,” it said.
“While the previous administration also targeted ambitious infrastructure spending, it had consistently failed to meet its target,” it added.
The government targets to spend P631.9 billion on infrastructure this year. Next year, it plans to spend more than P890 billion on projects that will be undertaken simultaneously in all regions, including small-, medium- and large-scale ventures.
The planned spending on purely infrastructure represents 5.2 percent of next year’s P3.35 trillion national budget, up 41 percent from this year’s target.
BMI is forecasting the Philippine gross domestic product to grow by 6.9 percent this year, and 6.3 percent in 2017.