Capitalists And Money

Infrastructure spending rises 25%

By Jenina P. Ibanez, Senior Reporter

INFRASTRUCTURE SPENDING in September went up by 25% as the government ramps up construction activities before the election ban on public works in March next year, preliminary data from the Department of Budget and Man-agement (DBM) showed.

Infrastructure and other capital outlays rose to P71.2 billion in September from P56.9 billion in the same month last year. The figure is also a tad higher than the P70.9 billion posted in August 2021.

Higher infrastructure spending can be attributed to preparations for the May elections, especially in anticipation of an election ban on some public works starting in March, Rizal Commercial Banking Corp. (RCBC) Chief Econo-mist Michael L. Ricafort said in a Viber message.

He said this further increases the infrastructure spending done to stimulate economic recovery from the effects of the pandemic.

The Commission on Elections (Comelec) said public works ban for the May national elections will run from March 25 to May 8, 2022. The public works ban covers disbursement and spending as well as construction activity. This is aimed at preventing politicians from using state resources for their election campaign.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the coming elections is the major reason for the spending spike.

“I am assuming that with 2021 almost done, infrastructure spending is being pushed harder. Plus, the current administration is soon stepping out and infrastructure development, its major policy centerpiece, is being maxim-ized,” he said in a Viber message.

In the first nine months of the year, infrastructure and capital outlays spending increased by 42.1% to P641.5 billion from P451.5 billion last year. This is also 8.86% higher than the programmed P589.3 billion.

In the third quarter alone, infrastructure spending went up by 39.9% to P214.9 billion from P153.5 billion last year. Third-quarter spending was also 26.6% higher than the programmed P169.7 billion.

“Growth could still be sustained as the elections draw closer, as well as to further pump-prime the economy to speed up the creation of more jobs and help expedite the economic recovery,” Mr. Ricafort said.

Infrastructure spending growth would likely continue its pace in the coming months, Mr. Asuncion said.

The government set a P1.02-trillion infrastructure budget for this year, which represents around 5.1% of the gross domestic product (GDP).

The Development Budget Coordination Committee raised the spending cap on the infrastructure program to P1.29 trillion or 5.8% of GDP for 2022.

Under the proposed 2022 national budget approved by the House of Representatives, P1.18 trillion was set aside for infrastructure.