Government spending hits P328-B high in July

Government spending reached its peak so far for the year at P328.1 billion in July 2018, representing an increase of P83.0 billion, or 34%, from the same period last year. The spectacular rise in spending was due to infrastructure and other capital outlays as well as subsidies to government corporations. For the first seven months of the year, disbursements have reached P1.932 trillion, higher by P355.7 billion or 23%, year-on-year.

“The fiscal numbers in July 2018 confirm progress in our efforts to reduce underspending and instill public financial reforms,” said Budget and Management Secretary Benjamin E. Diokno. “Government spending is intact, and this means that our people will enjoy the benefits of government projects sooner, such as school buildings and hospitals for the poor, and road and mass transit projects for commuters,” he added.

Infrastructure and other capital outlays owing to the Build Build Build Program continue to boost government spending as it reached P84.5 billion, surging by P36.1 billion or 75% compared to July 2017.

The implementation of infrastructure projects by the Department of Public Works and Highways (DPWH) continue to pace infrastructure disbursements. In particular, these include nationwide road construction, improvement, and widening projects; the Pasig-Marikina River Channel Improvement Project; and flood control, drainage, and dike improvement and rehabilitation projects.

Capital acquisition through the Armed Forces of the Philippines (AFP) Modernization Program (e.g., Frigate Acquisition Project and Civil Engineering Equipment Acquisition Project); and capital outlay projects (e.g., procurement of machinery, aircraft, and aircraft equipment) of the Department of Transportation—Philippine Coast Guard (DOTr-PCG) also contributed to higher infrastructure and other capital spending.

Meanwhile, subsidies to government corporations hit P32.5 billion, nearly double or 93% higher than in July of the previous year. This is primarily due to the P27.7 billion health insurance premiums of indigents enrolled under the National Health Insurance Program of the Philippine Health Insurance Corporation (PHIC), irrigation projects worth P2.0 billion under the National Irrigation Administration (NIA), and another P2.0 billion for cash downloads to the beneficiaries of the Tax Reform Cash Transfer Project under the LandBank.

Another driver of spending growth was the sustained increase in Personnel Services owing to higher salaries of civilian government employees by virtue of the third tranche of compensation adjustment, and higher salaries of military and uniformed personnel authorized by Joint Resolution No. 1, s. 2018. Personnel Services reached P70.6 billion in July 2018, increasing by P16.9 billion or 32%, year-on-year.