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In the first two months of 2023, infrastructure spending increased by 22% to PHP145.6 billion as the Marcos administration accelerated the execution of its public works and transportation-related projects.

According to a statement released Tuesday by the Department of Budget and Management (DBM), infrastructure spending performance as of the end of February 2023 was greater than the PHP119.4 billion reported during the same period last year.

“Consistent with the government’s commitment to maintaining high investments in infrastructure over the medium term, infrastructure spending substantially increased by 22 percent from PHP119.4 billion last year to PHP145.6 billion as of end-February 2023,” the DBM stated.

The expedited implementation of national public works and transportation-related projects is primarily responsible for the outstanding performance in infrastructure spending, it was underlined.

The DBM noted that various factors, including the building, rehabilitation, and preventive maintenance of access, by-pass, and diversion roads and bridges; flood mitigation activities; and succeeding progress billings for the construction of government buildings, were responsible for the increased infrastructure spending.

As part of its economic strategy, the Marcos government is determined to reverse the “underinvestment” in infrastructure, according to Finance Secretary Benjamin Diokno in April.

The government has budgeted between $20 billion and $40 billion per year for infrastructure through 2023 as part of the medium-term infrastructure program. The goal is to maintain infrastructure spending at 5 to 6 percent of GDP yearly.

The effectiveness of national government spending

In the meantime, according to the DBM, national government expenditures were PHP620.7 billion, a slight increase of 0.2 percent or PHP1 billion from the same period in 2022.

“In particular, spending in January was unchanged from PHP301.5 billion in the prior year to PHP302.4 billion. It, too, leveled out at PHP318.2 billion in February from almost the same output last year, according to the DBM.

The DBM stated that the “increases recorded in infrastructure and maintenance spending” were to blame for the “modest growth” in national government spending during the two months of this year.

“Capital expenditure for infrastructure and other purposes increased to PHP113.0 billion, up PHP30.0 billion or 36.1 percent over the previous year. The report stated that the increased disbursements recorded in the DPWH (Department of Public Works and Highways) and the DOTr (Department of Transportation) were substantially responsible for this strong infrastructure spending performance.

The DBM noted that the drop in some expense categories “dampened” the gain in infrastructure and maintenance spending that had been reported.

According to the DBM, the decline in transfers to local government units due to lower National Tax Allotment shares and interest payments, as well as the timing of subsidy releases to the Power Sector Assets and Liabilities Management Corporation for the implementation of the Murang Kuryente Act, moderated the increase in national government spending.

In spite of this, the DBM predicted that government expenditure would continue to be “strong” throughout the remainder of 2023, reaching a peak of PHP1.465 trillion in the second quarter, or 28% of the full-year target.

“Disbursements will continue to be robust for the remainder of the year, with a program of PHP1,279.8 billion in the third quarter (24.5%) and accelerating to PHP1,366.2 billion by the fourth quarter (26.1%). According to the DBM, the government has set an expenditure goal equal to 21.3 percent.

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