NEWS

By Pilar Manuel | CNN Philippines | July 7, 2021 1:19 PM

Photo: CNN Philippines

Metro Manila (CNN Philippines, July 7) — Government spending on infrastructure surged in May, data from the Department of Budget and Management revealed.

Data published Tuesday showed infrastructure expenditure amounted to ₱78.9 billion during the month, a whopping 102.5 percent spike from the ₱38.9 billion spent in May 2020.

“This is largely credited to the ongoing implementation of infrastructure projects of the Department of Public Works and Highways nationwide,” the DBM said.

Infrastructure projects include the construction, repair and rehabilitation of roads and bridges along with flood mitigation structures and drainage systems.

“In contrast to May last year, construction activities were barely conducted amid the extended implementation of the enhanced community quarantine for most part of Luzon and key areas in the Visayas regions,” the DBM explained.

The recent tally brought infrastructure disbursements to ₱332.3 billion as of end-May, up by 97.1 percent from the ₱235.2 billion registered during the same period last year.

The “increased” infrastructure spending, which is among the priorities of the government’s economic recovery program, shall generate more jobs through various infrastructure projects, RCBC chief economist Michael Ricafort told CNN Philippines.

It would likewise “benefit contractors, suppliers, and other related/allied industries in the supply chain/value chains of infrastructure projects, including those in the Build, Build, Build Program,” he added.

However, Ricafort flagged how higher state spending, especially on infrastructure, will lead to wider budget deficits. This will compel authorities to incur more loans to finance those in line with efforts to jumpstart the economy amid the COVID-19 pandemic.

The DBM reported ₱456.7 billion in overall government expenditure during the month, bringing total disbursements as of end-May to ₱1.8 trillion. The figures were higher by 29.2 percent and 8.8 percent, respectively from last year’s tallies.

“Relatedly, disbursements will continue to increase in June, albeit at a slower rate when compared to May mainly on account of the timing of payments by line agencies and subsidy releases to government corporations,” said the agency.

Still, it said the spending performance for the current quarter mainly driven by infrastructure and Bayanihan to Recover as One expenditures “bodes well” for economic growth prospects.

Source: CNN Philippines