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Infra, capital spending plummeted in July

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Infra, capital spending plummeted in July

State infrastructure and capital spending plunged to P52.3 billion in July, dragging the year-to-date tally, according to the Department of Budget and Management (DBM).

In its latest disbursement report on Wednesday, the Budget department said the amount was a 30.4-decrease from the P75.2 billion spent in July 2019. It was also smaller than June’s P62.8 billion.

The DBM attributed the reduced spending to base effects, mainly on account of the one-off expenditure in the same month last year with the advance payment made by the Department of National Defense for projects under the Revised AFP (Armed Forces of the Philippines) Modernization Program (RAFPMP).

“In addition, disbursements of the DPWH (Department of Public Works and Highways) were lower year-on-year, largely attributed to the gradual implementation of public works amid health and safety protocols in place, as well as the inclement weather in some areas, which slowed down infrastructure activities,” it added.

For January to July, spending slid by 9.4 percent to P350.3 billion from P386.6 billion in the same period a year ago.

“Infrastructure spending was lower year-on-year due to the base effect of high infrastructure expenditures in the same period last year, brought about by the payment of prior years’ accounts payables and the temporary suspension of public works due to the implementation of the enhanced community quarantine [in] Luzon and other areas nationwide starting mid-March up to late May,” the Budget department explained.

This brought total government spending for the first seven months of the year, which includes those for maintenance, personnel services and subsidies, to P2.38 trillion. This is 23.8 percent or P458.8 billion higher than the year-ago amount, which the department attributed to “higher maintenance expenditures and subsidy contribution to GOCCs (government-owned and -controlled corporations).”

In particular, the government spent for the implementation of coronavirus disease 2019 pandemic-related measures, such as the Social Amelioration Program of the Department of Social Welfare and Development; health expenditures and banner programs of the Department of Health; Covid-19 adjustment measures of the Department of Labor and Employment; and the Small Business Wage Subsidy Program under the Social Security System.

In an outlook, the DBM said only P244.9 billion, or 6 percent, remained in the P4.1-trillion outlay programmed for this year.

“This consists mainly of unreleased allotments in agency-specific budget (P265.7 billion) and in Special Purpose Funds (P212.9 billion), the release of which will be made upon submission of special budget request/s by the line agencies and other documentary requirements,” it added.

Some P68.6 billion worth of allotments were issued in August, according to the department.

Significant releases include the P38.3 billion in capital outlays under the Public Works department that were classified as “for later release,” or those subject to specific conditions and require compliance with certain documentary requirements/approvals from other authorities; P5.6 billion in additional releases for the human resources for health under the Health department; and P1.6 billion for the RAFPMP.