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Philippines: July infra spending fails to impress despite looser lockdown
MANILA, Philippines — Infrastructure spending of the Duterte administration inched up on an annual basis in July, but dipped considerably from the previous month even as pandemic curbs were more relaxed back then.
The national government spent P87.7 billion in capital outlays in July, up 22.2% year-on-year, data from the Department of Budget and Management released Tuesday showed. But compared to the previous month, capital outlays fell 22%.
In the first seven months, capital outlays grew 48.5% year-on-year to P671.9 billion.
The month-on-month spending slack comes at a time the Duterte administration is banking on so-called “multiplier effects” from infrastructure build-up to drive growth amid a pandemic-induced economic slump. Movement restrictions were more-relaxed in July, but renewed lockdowns in August would likely worsen the spending decline as construction activities likely took a hit again.
As the economy shrinks due to prolonged mobility curbs while government debts continue to grow, Nicholas Mapa, senior economist at ING Bank in Manila, said the July data shows a difficult balancing act by the state to continue with its infrastructure plans while tempering overall spending.
“Trends in government spending highlight the possible directives of authorities which center on a push for infrastructure development while simultaneously looking to rein in overall spending, possibly to limit the hit to both the country’s deficit and debt metrics,” Mapa said in an e-mail exchange.
“In the coming months we can expect spending to reflect more of the same with the emphasis on infrastructure apparent while authorities look to curtail other spending to close out the year,” he added.
Breaking down the outlays, P72.8 billion went directly to nationally-funded infrastructure projects, up 39.1% from last year. From January to July, this segment amounted to P499.4 billion, up 42.6% annually.
Meanwhile, the balance of P14.9 billion was given to towns, cities and municipalities in July to assist on building infrastructure in their localities, down 22.4% year-on-year. The latest figure nonetheless increased the 7-month allocations to local government units 24.7% year-on-year to P126.5 billion.
No amount went to state corporations last July, data showed. So far this year, government-run companies have received P46 billion, a dramatic jump from just P8 million a year ago.
Source: https://www.philstar.com/business/2021/09/14/2127113/july-infra-spending-fails-impress-despite-looser-lockdown