Construction works are expected to pick up during the dry season. — PHILIPPINE STAR/ MICHAEL VARCAS
By Beatrice M. Laforga, Reporter
STATE SPENDING on infrastructure climbed 41.1% year on year to P87.7 billion in March as the government completed more public works projects, the Department of Budget and Management (DBM) reported.
Latest DBM data released on Thursday showed that infrastructure and other capital outlays in March were higher than the P62.2 billion in the same month last year. On a monthly basis, this was also 56.4% bigger than the P56.1 billion seen in February.
“This was largely propelled by the payment for completed and partially completed infrastructure projects of the Department of Public Works and Highways (DPWH) nationwide such as construction, repair and rehabilitation of access, by-pass, and diversion roads, bridges, and flood mitigation structures and drainage systems,” it said.
Spending in March brought the first-quarter total to P195.2 billion, up 25.1% from P156.1 billion a year ago — when the first and strictest form of lockdown was imposed in Luzon.
On a quarterly basis, the DBM said the first quarter’s growth showed signs of recovery from last year’s 32.7% slump in the fourth quarter and the 33% decline in the third quarter.
The bulk of the funds were spent on the construction of roads and payment to direct suppliers of foreign-assisted projects such as the Metro Manila Subway Project and the Davao City By-Pass Construction Project.
Public construction helped temper the overall slump in the entire construction sector in the first quarter, jumping 26.2% year on year after seeing a 17.7% decline in the fourth quarter.
“This trend can be a good sign that the construction sector is already bouncing back from the effects of the community restrictions in place in the previous year as the economy is gradually reopened and the implementation of projects gains steam,” the DBM said.
The government allocated P1.2 trillion for infrastructure projects this year, as it pins its economic recovery hopes on an aggressive infrastructure program. It also targets to complete big-ticket projects before the Duterte administration steps down in mid-2022.
“President [Rodrigo R.] Duterte is on the last year of his term, he has to heighten infrastructure spending to leave a legacy of a progressive economy that was able to rise up from the pandemic,” said Colegio de San Juan de Letran Graduate School Dean Emmanuel J. Lopez in an e-mail.
Construction works are also expected to pick up during the dry season.
Moving forward, state spending on infrastructure will likely sustain its growth in the second quarter despite the lockdown reimposed in Metro Manila and nearby areas according to Cid L. Terosa, a senior economist at University of Asia and the Pacific.
“Gains made by countries around the world and the Philippine government in terms of the number of vaccinated individuals have raised expectations of more brisk economic and business activities in the second half of the year. Capital formation in the form of infrastructure spending will be one of the foundations of a resurgent economy,” Mr. Terosa said in an e-mail on Thursday.
Accelerating the infrastructure rollout is a time-tested way of creating multiplier effects across sectors and income classes, as it generates jobs and provide incomes for households, he said.
“Ramping up infrastructure spending is tantamount to preparing the economy to ride the wave of future domestic and international economic revival,” he added.
Economic managers earlier this week downgraded its gross domestic product (GDP) growth target to 6-7% from 6.5-7.5% penciled in last December 2020. This after first-quarter GDP shrank by 4.2% as the prolonged coronavirus pandemic continued to dampen economic activity.