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Infra, capital spending 32.4% higher in March

Infrastructure and other capital spending climbed in March, the Budget department reported, with government resources said to have been used for roads, police stations and schools.

Data released on Wednesday put spending at P63.4 billion during the month, up 32.4 percent from the P47.9 billion recorded a year earlier.

“This is on account of the implementation of road infrastructure projects of the Department of Public Works and Highways, completed construction of police stations by the Department of the Interior and Local Government-Philippine National Police, and repairs and rehabilitation of school facilities as well as purchase of office supplies and furniture for various Department of Education schools nationwide,” the department said in a statement.

First quarter expenditures subsequently grew by 33.7 percent to P157.1 billion.

Infrastructure and capital spending for March comprised a fifth of the previously reported P313.1 billion in public expenditures for the month. The same proportion was seen year to date based on the quarter’s P782 billion in disbursements.

Analysts welcomed the latest data, noting that continued government spending was crucial for Philippine competitiveness and economic growth.

“The recent report is heartening as it supports views of stronger economic expansion in the first quarter and affirms widespread expectations of an infrastructure-led growth this year,” Land Bank of the Philippines economist Guian Angelo Dumalagan told The Manila Times.

“[I]nfrastructure spending is likely to pick up further as the government rolls out more projects,” he added.

IHS Markit Asia Pacific chief economist Rajiv Biswas, meanwhile, said March’s results showed that the government was delivering on promises to ramp up infrastructure spending.

“The ambitious plan to build new ports, airports, roads and railways as well as critical infrastructure such as power stations will help to boost the competitiveness of the Philippines as a hub for manufacturing,” he told The Manila Times.

State spending on infrastructure spending will help support Philippine gross domestic product (GDP) growth, which IHS Markit said could dip slightly to 6.6 percent this year from 2017’s 6.7 percent.

The government, which is targeting 7.0-8.0 percent GDP growth for 2018, is banking on its “Build Build Build” program to provide the impetus.

At least 34 flagship projects are expected to be rolled out this year or early in 2019.

The ambitious infrastructure program will be bankrolled by tax reforms and concessional loans, with the overall budget expected to hit up to P9 trillion by 2022.

As a result, the share of state infrastructure spending to GDP is expected to hit 7.3 percent — from 5.4 percent in 2017 — at the end of the Duterte administration’s six-year term.

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