By Beatriz Marie D. Cruz, Reporter
SOME public works projects are expected to experience minor delays due to the spending ban leading up to the midterm elections in May, government contractors said.
“The progress of government construction projects is hinged on funding from the government. Hence, we expect slight delays in the completion of these ongoing projects,” Jason C. Valderrama, founder and president of construction consultancy JCV & Associates, said via Viber.
“There will also be a temporary dip in revenue of government-focused contractors in April and May,” Mr. Valderrama noted.
Ahead of the May 12 elections, the Commission on Elections (Comelec) will impose a ban on public works spending starting March 28, which will run for 45 days.
The Comelec has exempted from the ban 48 public infrastructure projects being pursued as public-private partnerships.
The case is different for projects that are wholly government-funded, Mr. Valderrama said, adding: “The temporary cessation of disbursement during the election ban will certainly affect their cash flow.”
EEI Corp. Senior Vice-President Earl Jason R. Vistro said the impact of the election spending ban varies by market segment.
“We normally see poll spending bans to impose delays on local-level government projects that have not yet started, which would consequently affect construction activity and revenue for contractors primarily engaged in such type of projects,” Mr. Vistro said in an e-mail.
Mr. Vistro also noted that such projects that have not yet started may be affected in jurisdictions that experience a change in leadership and priorities.
“New projects in both the private and public works sector may also experience some potential delays with permits and processing when there is a change of administration at the local level,” he also said.
Major infrastructure projects under the Philippine Development Plan, such as the Metro Manila Subway or North-South Commuter Railway, will likely be unaffected, added Mr. Vistro, who is also EEI’s head of government relations, external affairs, safety and security.
Eduardo A. Sahagun, PHINMA Corp. director and executive vice-president for construction materials, said the spending ban will likely pose minimal effects on government projects if contracts were entered into early.
“Normally, the Public Works (department) will award the contracts before the construction ban,” he said via telephone, allowing much of the critical work to have been carried out by the time the ban sets in.
Budget Undersecretary Goddes Hope O. Libiran has said that about 12,900 projects worth P707 billion will be affected by the spending ban. The bulk of these projects are overseen by the Department of Public Works and Highways.
The government hopes to spend the equivalent of 5-6% of gross domestic product annually for infrastructure through 2028.