By PressOnePH Business
The Duterte administration is struggling to get out of a spending slump precipitated by a budget hold-up early in the year, with infrastructure outlays crucial to economic growth still on a decline for the first eight months.
Latest data from the Department of Budget and Management (DBM) released Monday showed capital outlays contracted 6.5 percent year-on-year to P74.7 billion in August.
Compared with the previous month, the same type of spending dropped a faster 13.3 percent. The eight-month tally amounted to P538.4 billion, down 13.7 percent on an annual basis.
In a statement, DBM still blamed the “late passage of the 2019 budget and the election ban” on new public works for the lackluster spending performance, factors that acted as a speed bump to the government’s ambitious “Build, Build, Build” program.
Allegations of budget insertions among lawmakers delayed the passage of the P3.7-trillion budget by nearly four months, preventing agencies from procuring services for state projects early in the year.
When President Rodrigo Duterte signed the budget bill into law on April 15, work cannot also immediately begin for new infrastructure because an election ban on new public projects was in effect until May 15, the day after the midterm polls.
The latest data indicate that government promises to catch up on spending priorities for the rest of year remained unfulfilled and are likely to persist throughout the year.
Despite saying that only 8.6 percent of the budget remained unreleased as of September, DBM itself said in a statement it was only “hopeful” that this “signals a faster rate of spending” for the rest of 2019.
Breaking down capital expenses, direct infrastructure spending by national agencies decreased 11.8 percent to P448 billion, figures showed.
Equity transfers to state corporations plummeted 73.9 percent year on year to P800 million, while those granted as assistance to local governments went down more than a fifth to P91.6 billion.
“For September 2019, higher disbursements are expected as agencies utilize their remaining NCAs before they lapse at the end of the quarter, and as they try to catch up with their respective spending plans,” DBM said.
NCAs or notices of cash allocation are authorities used by line agencies to withdraw money from the Treasury to pay for their obligations.
Economic managers are working double-time to fast-track infrastructure projects for the remainder of the year and boost economic growth from its four-year low of 5.5 percent in the second quarter.
The Duterte government is aiming for 6 to 7 percent growth this year, goals analysts said were already unlikely to be met.