DBM says infra spending to boost first-quarter GDP

Higher government spending on infrastructure will boost gross domestic product (GDP) growth in the first quarter of 2016, according to Budget Secretary Florencio B. Abad. 

“We should have good first-quarter growth, bolstered by the high obligation rate of the DPWH (Department of Public Works and Highways) and by election spending,” Abad said.

The Department of Budget and Management (DBM) reported recently that the DPWH has obligated 44 percent, or P211 billion of its P479-billion allotment, an increase of 12 percent from the 32-percent obligation rate over the same period last year.

The DPWH also utilized 98 percent of its cash allocation in the first quarter, resulting in disbursements of P55 billion.

“We laud the DPWH’s successful efforts to ensure the continuity of their projects before the election ban took effect. These promising figures for obligations and NCA utilization rates suggest that public construction will continue to drive growth upward in the first quarter of 2016, as it did last year,” the secretary added.

“I also want to emphasize that the P205 billion—or 65 percent of the total allotment—was obligated for regional projects before the start of the election ban. This means the DPWH will continue to improve local infrastructure uninterrupted throughout the year,” he added.

In total, 91.8 percent, or P1.49 trillion of the P1.62-trillion total budget for agencies, were released in the first quarter, bringing total releases to 82.3 percent of the P3.002-trillion national budget for 2016. This represents a 0.7-percent increase over allotment releases over the same period last year.

“In the coming months, the 82.3-percent figure for total allotment releases over program should increase, as the DBM releases…funds for calamities or issue special shares to local government units from national taxes, for example,” Abad said.