May government spending up 20.4%

July 10, 2017

Government spending in May rose 20.4 percent from year-ago figures reaching P261.7 billion, the budget department said Monday. This shows that policy reforms for more efficient project implementation have started to gain traction. For fiscal year 2017, the General Appropriations Act sets the budget at P3.35 trillion, equivalent to 21.1 percent of GDP. Current operating expenditures was recorded at P200.6 billion, resulting to a 17.9 percent increase. Noteworthy is the growth in maintenance spending, as Maintenance and Other Operating Expenditures increased by 34.0 percent, settling at P52 billion. This was driven by the pay-out of cash grants to Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries, the grant of operating requirements and allowances to teachers of the Department of Education, and expenses incurred in preparation for the ASEAN Summit. The increase also reflects payments that should have been made in April but spilled over in May given the numerous holidays in April. Personnel services registered at P89.7 billion, or an 18.5 percent increase, primarily due to the release of P32.6 billion for the mid-year bonus of government employees. As per the second tranche implementation of the Compensation Adjustment of 2016, Capital outlays amounted to P60.9 billion, or an increase of 29.1 percent. The boost was driven by the surge in infrastructure and other capital outlays spending, which expanded by 31.4 percent, reaching P46.2 billion. This is primarily a result of completed road construction, repair and rehabilitation, and flood control infrastructure projects implemented by the Department of Public Works and Highways. Some of these projects include the Impalutao - Dalwangan Road Section in Bukidnon, the Calintaan-Sablayan Road Section in Occidental Mindoro, and the Pasig-Marikina River Channel Improvement Project (Phase III). The government intends to spend P8 to P9 trillion for public infrastructure in the next six years. For FY 2017, P847.2 billion is allocated for infrastructure or 5.3 percent of GDP. Preliminary infrastructure budget for the FY 2018 budget is at P1 trillion or 5.8 percent of GDP. Infrastructure spending will gradually rise from 5.3 percent in 2017 to 7.3 percent of GDP by 2022. DMS