Senator Franklin Drilon yesterday urged the Department of Public Works and Highways (DPWH) to accelerate the implementation of government infrastructure projects in a bid to ramp up domestic economic growth.
Drilon, chairman of the Senate Finance Committee, said the slack spending in infrastructure in the first half of the year resulted mainly to a GDP (gross domestic product) growth of 4%, below the government’s estimate of 4.5%-5.5%. Economic growth in the first quarter was recorded at 4.9% while second quarter growth decelerated to just 3.4%.
“The criticism being hurled, which has some validity, is the underspending this year which has caused the contraction of our public spending and has affected our achieving the GDP growth,” said Drilon during a hearing on next year’s proposed P125 billion budget of the DPWH, which holds bulk of state infrastructure projects, adding that infrastructure spending is crucial in order to achieve the government’s programmed 7% GDP growth for the year.
Drilon likewise said allotting more funds for infrastructure is needed to generate jobs and pump prime economic activity especially in the countryside, warning that allowing projects lined-up in 2011 to migrate to 2012 because of non-execution would bring “difficulties” economically.
Out of the P90.9 billion allocated to DPWH in this year’s budget for infrastructure, only P16.39 billion has been actually disbursed to contractors as of August, said DPWH Secretary Rogelio Singson. Infrastructure projects for DPWH grew to P99.3 billion in the proposed 2012 outlay.
“While there appears to be an increase of P8 billion in capital outlay over the 2011 budget, the infrastructure budget of our government is still grossly inadequate and we need a lot of catching up,” said Drilon whose committee is tackling the proposed P1.816 trillion national budget for 2012.
Singson attributed the sluggish infrastructure spending to “delays” in the implementation of various projects, with the DPWH making sure that what are being funded are the “right projects.”
According to Drilon, the World Bank estimates that the Philippines needs to spend an estimated P550 billion, or 5% of GDP, for infrastructure every year to be able to catch up with neighbors in the Association of Southeast Asian Nations (ASEAN) region. The WB ranked the Philippines just ahead of Cambodia, with Singapore ranking first in the ASEAN, followed by Thailand, Indonesia and Vietnam.
Contained in next year’s outlay, Drilon said, is a total of P270 billion in infrastructure funds, including allocations to state-owned firms, local government units and other departments, but the fund is still insufficient based on the Washington-based institution’s competitive ranking in terms of infrastructure.
Singson, meanwhile, assured senators that the agency targets to disburse P80 billion by year-end for locally-funded and foreign-assisted infrastructure projects listed this year.
He added that the department was actually able to disburse P26 billion in July alone, and about P37 billion last month, as a majority of infrastructure projects were being rolled out.