Angelo Taningco
Economist, Treasury Group

The Philippine government’s infrastructure spending exhibited positive growth in June, raising its second-quarter and first-half figures as a result of accelerated disbursements on infrastructure and capital outlay projects. It rose 12.2% month-on-month (mom) and 11.4% year-on-year (yoy) to P51.9 billion in June on the back of expenditures for road infrastructure and irrigation projects as well as for capital outlay projects of state universities and colleges (SUCs), according to the Department of Budget and Management (DBM) (Figure).

Figure: Infrastructure Spending
Jan. 2016 – Jun. 2017
(PHP billion)

 
The June infrastructure spending total is the biggest monthly tally since the start of the year. This led the second quarter amount to grow 12.0% quarter-on-quarter (qoq) and 5.9% yoy to P131.6 billion, which is P3.8 billion or 3.0% above the programmed disbursement for the period thanks to the fast tracking of road infrastructure projects in May, according to the DBM.

Infrastructure spending for the first half of the year valued P249.1 billion, which is 8.8% bigger on a yoy basis. The said amount is greater than the programmed disbursement for the given period by P12.5 billion (5.3%). As a share of projected gross domestic product (GDP), we estimate infrastructure spending to be at 3.3% in the first half of the year.

For the month of July, we might see lower infrastructure spending compared to June as the first (last) month of the quarter usually registers a relatively low (high) utilization of cash allocations by government agencies. For the third and fourth quarters, however, we expect infrastructure and other capital outlays to accelerate, and to enable its second-half to surpass its first-half total. But we continue to expect the full-year infrastructure spending by the government to fall short of its target, which is P847.2 billion or 5.3% of GDP.

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