Reenacted budget, poll ban impact: Gov’t spending on infrastructure down by more than half

Government spending on infrastructure fell by more than half in April as a result of Congress’ failure to pass a national budget on time and a freeze on projects required by election laws, According to data from the Department of Budget and Management (DBM), public spending on infrastructure and other projects last April slid 56.9 percent from P65.6 billion in 2018 and fell by 52.7 percent from P59.7 billion a month ago. The DBM, in a report, attributed the “significant” drop in infrastructure spending to delays in passing the budget and the election ban on implementing public works projects. From January to April 2019, the amount of government funds released for infrastructure and other projects fell by 7.3 percent to P206.4 billion from P222.7 billion during the first four months of 2018. The DBM said spending on infrastructure in the first quarter of 2019 increased mainly because payments had been made on completed projects. But spending last April, it said, was “lower year-on-year as some infrastructure project were not started following the late budget approval and election ban.” President Rodrigo Duterte was able to sign the P3.7-trillion national budget for 2019 only in mid-April as the two chambers of Congress squabbled over pork barrel funds and insertions, forcing the government to operate using a reenacted 2018 budget. It resulted in underspending of at least P1 billion per day on public goods and services at the start of 2019. The Commission on Elections (Comelec) also failed to act on economic managers’ request to exempt big-ticket project from the election ban ahead of the May 13 midterm elections. Election laws require a suspension of project implementation for fear this would give undue campaign advantage to incumbent officials running for either reelection or other positions. The DBM expressed optimism infrastructure spending would rebound for the rest of 2019, saying the national government was “implementing catch-up measures.” These measures, the department said, would ease the impact of resorting to a reenacted budget and help the government meet its spending and gross domestic product (GDP) targets. Among these measures, the DBM said, was a commitment by the Department of Public Works and Highways and Department of Transportation. the two lead agencies in the government’s ambitious P3-trillion “Build, Build, Build” program, to accelerate implementation of such projects like railways. The two departments, according to the DBM, would spend a combined P800 billion to “support the government target” of spending an equivalent of 4.2 percent of GDP on infrastructure and hitting a 6 percent economic growth in 2019. Describing the plan as “bold,” the DBM said it was aimed at reversing a four-year low GDP growth of 5.6 percent as a result of the delay in passing the 2019 national budget.