Infrastructure spending posted a sluggish growth in July, the first month in office of the Duterte administration, data from the Budget Department show.
The Budget Department said in a disbursements report that infrastructure and capital spending grew 1 percent or P400 million in July to P38.7 billion from P38.3 billion recorded in the same month in 2015.
Disbursements by the Public Works Department increased P5.9 billion from completed road infrastructure activities and convergence programs.
This was offset by lower disbursements by the Defense Department and the Autonomous Region of Muslim Mindanao.
Capital expenditures of the Defense Department dropped in July because of the one-off payment under the Armed Forces of the Philippines modernization program for the FA-50 aircraft acquisition project in July 2015.
“For the second semester this year, the projects under the AFP modernization program are still in various stages of procurement, while some are still for evaluation relative to the priorities of the new administration,” the Budget Department said.
The implementation of a number of local infrastructure projects in ARMM are still ongoing after experiencing delays in procurement due to the election ban, the Budget Department said.
“The impact of this, however, was tempered by the increase in other capital expenditures of agencies which include the repair and rehabilitation of school facilities by the DepEd and some capital outlays of the SUCs [state universities and colleges],” the agency said.
The Budget Department said the minimal growth performance was due to the transition in government during the period.
Meanwhile, interest payments in July also declined 24.6 percent to P40 billion following lower interest rates, bond exchange transactions and maturities of high coupon debts.
“It is expected that the disbursements will pick-up in the succeeding months,” the Budget Department said.
Personnel services in July also declined 8.4 percent to P42.6 billion from P46.5 billion a year ago.
The Budget Department said it was optimistic that the slowdown in disbursements in July was temporary and expected as a result of the transition to a new administration.
“Underspending remains a key challenge but as agency heads devote more time in the operations of their respective offices, they will soon have a better grasp of their programs and projects which could, in the succeeding months, accelerate disbursements,” it said.