Government infrastructure spending down

PHILIPPINES - In Brief 17 Dec 2013 by Romeo Bernardo

The papers today reported a 25.7% "surge" in government infrastructure spending from January to October. This is not good news. In fact, based on our calculations, the cumulative figure hides a 12.7% decline in October infra expenditures, an acceleration of the 7% fall in September. We had occasion to ask the Budget Secretary the other day about the spending drop and its linkage to the pork barrel scandal. While agreeing with us that bureaucrats in charge of disbursements may have taken a more conservative stance following legal cases filed against a number of public officials by the Department of Justice, he is nevertheless of the view that this is a temporary situation and expects spending to pick up in light of: (a) reforms they continue to introduce in budget processes to reduce red tape and expedite procurement, and (b) rehabilitation and reconstruction activities for typhoon-affected areas. We will be releasing our full interview with Secretary Abad in the coming days.

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