GOVERNMENT infrastructure spending fell in October due to a corruption scandal, data from the Department of Budget and Management (DBM) showed.
Infrastructure and other capital outlays plunged by 44.1 percent to P65.9 billion from P110 billion a year earlier, largely due to a continued contraction in spending by the Department of Public Works and Highways (DPWH).
“This resulted largely from the contraction of DPWH disbursements,” the DBM said.
The corruption scandal unfolded after President Ferdinand Marcos Jr. said in July that substandard projects had led to massive flooding in Metro Manila and other parts of the country.
It has led to a shake-up at the DPWH, leadership changes in Congress and a Cabinet shake-up that cost Amenah Pangandaman her post as Budget secretary.
The DBM said the continued fall in DPWH spending was due to four factors:
– Non-submission of billings by contractors amid ongoing validation of status of implementation and completion of flood control projects.
– Adverse weather conditions during the period.
– Pending release of final payments due to delays in securing Bureau of Internal Revenue Tax Clearance by contractors.
– Delays in the renewal of contractors’ Philippine Contractors Association Board licenses, which affected the submission of progress billings by contractors and subsequent processing of payments.
The DBM said the drop in infrastructure spending in October would have been larger if not for big fund releases for the Department of National Defense’s Revised Armed Forces of the Philippine’ Modernization Program, support for rice farm machinery and equipment under the Rice Competitiveness Enhancement Program, and direct payments by development partners for foreign-assisted rail projects of the Department of Transportation.
Infrastructure and other capital outlaws were also lower for the first 10 months of the year, falling by 13.7 percent to P943 billion from P1.09 trillion.
“Infrastructure spending contracted since the onset of the flood control issues of the DPWH which resulted in delays in the settlement of progress billings for its completed infrastructure projects,” the DBM said.
“Meanwhile, subsidy releases were lower pending the submission of progress billings by the contractors of the National Housing Authority and the National Irrigation Administration for their housing programs and irrigation projects, respectively,” it added.
As of Oct. 31, only P119.7 billion, or 1.9 percent, remained from the P6.33-trillion obligation program for the year. This balance consisted of unreleased agency-specific budgets and Special Purpose Funds that still require agencies to submit special budget requests and supporting documents.
“Lower infrastructure spending is expected to continue to weigh on overall government disbursements for the rest of the quarter while the DPWH boosts its efforts to address corruption issues, ramp up ongoing investigations and validations, and resume construction activities,” the DBM said.
