The Philippines: Infrastructure spending up 42% y/y in Apr 20

  • State spending on infrastructure surged in Apr 20 as the government ramped up construction of quarantine facilities and purchases of medical equipment in response to the COVID-19 pandemic.
  • The Department of Budget and Management’s (DBM) latest disbursement report showed infrastructure and other capital outlays jumped 42% y/y to PHP40.1bn in Apr 20. However, this was lower than the PHP62.2bn spent in Mar 20.
  • The DBM attributed the spending spike to the construction of quarantine facilities for COVID-19 patients and the Health department’s purchase of medical equipment.
  • Despite the spending spurt in Apr 20, infrastructure spending was still down 4.9% y/y to PHP196.2bn between Jan-Apr 20.
  • The DBM said infrastructure spending was lower year on year due to high base effects and the temporary ban on all construction activity during the enhanced community quarantine (ECQ).
  • Overall government spending more than doubled in Apr 20 to PHP461.7bn, bringing total spending for the four-month period to PHP1.31tr, up 31% y/y.
  • The DBM said it expects overall spending for the rest of 2Q20 to be largely driven by pandemic expenses, particularly the second tranche of government’s subsidy programs.
  • As most of the country is now under general community quarantine, infrastructure-implementing agencies may soon be able to ramp up construction work.
  • “This should facilitate the resumption of construction activities of the DPWH, and the Department of Transportation so they can speed up the implementation of public infrastructure projects, with the intention to catch up with the unintended delays during the ECQ,” the DBM said.
  • In May 20, key infrastructure projects under the flagship “Build, Build, Build” program were given exemption to resume construction work while observing minimum health and safety standards, such as physical distancing and testing.

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