Infrastructure spending below programmed levels in 9 months to Sept.
February 4, 2015 at 11:54
INFRASTRUCTURE spending in the first nine months of 2014 fell below programmed levels by almost a third as spending by key agencies was hindered by various delays, data from the Department of Budget and Management (DBM) showed.
The DBM, in its assessment report, said the government’s spending performance for infrastructure during the period was largely due to the Department of Public Works and Highways (DPWH), which fell below program by around P36.1 billion.
“The DPWH attributed this lower-than-expected performance to the delayed pre-construction activities; non-collection by some contractors of their 15 percent mobilization cost and/or preference of contractors to claim only upon completion of the project rather than issue progress billings; right-of-way problems; failure of biddings, among others,” the DBM said.
“We also see the impact of the PDAF (Priority Development Assistance Fund) and DAP (Disbursement Acceleration Program) issues to result in the overly cautious processing of payments,” it added.
For example, DBM said around P2.3 billion in DPWH’s budget could not be used as it includes requests for realignment and the use of savings, issues which the Supreme Court declared as unconstitutional and is the subject of the executive’s motion for reconsideration before the high tribunal.
The Department of Transportation and Communications, on the other hand, underspent by P8.9 billion due to delays in preparing feasibility studies and obtaining government approval for big-ticket projects, lack of personnel, prolonged bidding processes and late submissions of projected billings by contractors.
The Department of Education also cited delays, particularly in re-design and cost adjustments to school building and classroom projects to make them disaster-resilient. Only P7.7 billion out of the P30 billion allotted for classrooms was released during the period.
The Department of Health likewise experienced delays in the procurement process, the DBM report said.
Overall spending in the first nine months of 2014 hit P1.456 trillion, up 6.5% from a year earlier but 15.8% or P273.8 billion below the programmed P1.73 trillion.
“A major contributing factor for this growth in disbursements was the release of subsidies to GOCCs (Government-owned and -controlled corporations) in the amount of P62.2 billion, or an increase of P26.8 billion or 75.7 percent from the year-ago level,” the DBM said.
At end-September, the fiscal deficit stood at just P31.1 billion for the first three quarters, 72% lower compared with the P101.23 billion posted a year earlier.
The government’s fiscal performance in the first 11 months settled at a P26.8-billion deficit, much lower than the year-earlier P111.5-billion deficit. The end-November deficit was 89.9% short of the level equivalent to 2% of gross domestic product, a rule of thumb thought to represent a good balance between spending and responsible fiscal management. — Mikhail Franz E. Flores
