Angelo Taningco
Economist, Treasury Group

Infrastructure spending and capital outlays by the Philippine government amounted to P40.1 billion in August-posting 18% year-on-year (yoy) growth for the month buoyed by road infrastructure and flood control projects as well as education- and health-related capital outlay projects.

Figure: Public Infrastructure Spending
Mar. 2016 – Aug. 2017

 
However, the August tally is slightly less than the monthly average of P42.5 billion spanning the first seven months of the year and is lower than the previous month reading of P48.4 billion. Moreover, its 18% yoy increase was not able to eclipse July’s 25% yoy, indicating a growth moderation in the government’s infrastructure disbursements. On a cumulative basis, public infrastructure spending totaled P337.6 billion in January-August, up 12% yoy.

We still believe the government’s infrastructure disbursement target for the third quarter (Q3) of P137.8 billion is attainable. This is based on our view that public infrastructure spending in September would surpass that of July and August since the last month of the quarter usually records the biggest monthly total.

Supporting this view is the Department of Budget and Management (DBM), which cited September’s potentially “substantial” infrastructure disbursements amid the Department of Public Works and Highways’ (DPWH) “huge” spending requirements for its infrastructure projects last month. Likewise, we continue to expect the government’s current year target of P549.4 billion to be attained as well, especially since we believe public infrastructure spending will gain traction over the remaining months of the year.

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