INFRASTRUCTURE spending fell sharply in the absence of big-ticket defense and public works in April, the Department of Budget and Management (DBM) said over the weekend.
Capital expenditures dropped 21.1 percent to P33.5 billion in April from P42.5 billion a year earlier.
In the first four months of the year, infrastructure and other capital spending grew only 2.6 percent to P151 billion from P147.2 billion, the DBM said.
The absence of big-ticket capital expenditures under the Armed Forces of the Philippines Modernization Program (AFPMP) weakened fiscal spending, the DBM said.
Last year, the Department of National Defense bought FA-50 aircraft and anti-submarine helicopters, which contributed about P3.7 billion in disbursements in April 2016.
“For this year, similar AFPMP projects are programmed in the second semester as the approval and procurement of the same are still ongoing,” according to the Budget department.
Disbursements by the Department of Public Works and Highways (DPWH) were also lower, compared with accelerated implementation and completion of projects prior to the May 2016 elections. “For this year, however, implementation of projects under its road network services which include road widening, repair and rehabilitation, and flood control projects, among others are still underway,” it said.
The DBM said programming big-ticket expenditures in the second semester, like the capital outlay project of the DND-AFPMP, could lead to higher spending in the coming months.
The target fiscal spending on infrastructure is achievable, said Rajiv Biswas, chief economist at IHS Markit Asia Pacific.
“With government spending on infrastructure programs expected to accelerate in the second half of the fiscal year and some big-ticker defense capital expenditure also scheduled, the total annual capital spending is still expected to reach the government target of P847 billion, equivalent to around 5.3 percent of GDP,” he said.
On program, the government targets to spend P847 billion on infrastructure development covering projects in all regions, including small-, medium- and large-scale ventures to meet infrastructure spending-to-gross domestic product (GDP) ratio of 5.3 percent.
Under the Build, Build, Build component of Dutertenomics, the government intends to spend P8.4 trillion on infrastructure in the six years to 2022.