Infra spending surged in Sept, up 16.9%

State spending on infrastructure went up by 16.9% in September fueled by disbursements for finished transport projects, the Department of Budget and Management (DBM) said.

In the latest National Government disbursement report, spending on infrastructure and other capital outlays rose by P19.8 billion to P137.1 billion in September from P117.3 billion in the same month last year.

Month on month, infrastructure spending went up by 26.24% from P108.6 billion in August.

The DBM attributed the uptick in September disbursement to the payment for completed road network and bridge programs of the Department of Public Works and Highways (DPWH).

Higher disbursements were also made for various foreign-assisted projects of the Department of Transportation.

It also noted capital outlays for local counterpart requirements for implementing the Metro Manila Subway Project Phase 1, North-South Commuter Railway System, and the Davao Public Transport Modernization Project.

Funds were also used for the Department of National Defense’s (DND) Armed Forces of the Philippines modernization program, as well as the construction and repair of justice halls nationwide and implementation of the Department of Education’s computerization program.

In the January-to-September period, infrastructure spending rose by 14.6% to P982.4 billion from P857.6 billion in the same period in 2023.

“The robust spending growth for the period was largely credited… to infrastructure and other capital outlays with significant disbursements recorded in the DPWH for its banner infrastructure projects and the DND for its defense modernization projects,” the DBM said.

Overall infrastructure disbursements, which included transfers to local government units and subsidies to government-owned and -controlled corporations, went up by 12% to P1.14 trillion as of end-September.

“This was equivalent to 6.1% of GDP (gross domestic product) vis-a-vis 5.9% outturn for the same period last year and the 5.6% full-year target this year,” it said.

Philip Arnold “Randy” P. Tuaño, dean of the Ateneo School of Government, said the increase in infrastructure spending is likely to be sustained in the short term.

“(The increase was) due to a significant balance from various budget sources that remain available for release, and the prioritization of large-scale transport projects such as the Metro Manila Subway,” Mr. Tuaño said in an e-mail over the weekend.

He also expects a surge in infrastructure spending given that the 2025 midterm election is five months away.

“It should first be noted that infrastructure spending year on year had increased, and this will further increase going into the 2025 national budget,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said in a Viber message. “This is the underlying reason for spending improvements this year.”

The government’s infrastructure program for this year is set at P1.472 trillion, equivalent to 5.6% of GDP.

Mr. Ridon urged infrastructure agencies to improve absorptive capacity “particularly as 2025 is an election year in which the law mandates a suspension of project implementation for a specific period of time.”

“The challenges are that the absorption and burn rate by our key agencies, especially in infrastructure and agriculture, have been quite low,” former National Economic and Development Authority Secretary Cielito F. Habito, said at a conference at the University of the Philippines School of Economics on Friday.

Mr. Habito raised that there have been “questionable priorities” on allocations and utilization in some sectors.

“We allocate a lot of budget but it turns out it can’t be spent within the period it was meant to be used,” he said in mixed English and Filipino.

“This is a very important issue in our fiscal policy in general. It’s not so much the fiscal policy, but the implementation of the fiscal policies in that sense.”

Mr. Habito also mentioned the propensity of DPWH to “reblock” roads, calling it a “seemingly misplaced allocation of the budgets.”

He also said the government needs more public-private partnership types of projects given the shortage of public funds.

Source: Business World

The benefits and privileges of senior citizens in the Philippines

What are the Filipino senior citizens' benefits granted under existing laws and regulations.

Republic Act (RA) 9994, also known as the Expanded Senior Citizens Act of 2010, grants Filipinos ages 60 years and above the following benefits and privileges:

Entitlement to priority in queues: The law requires the creation of express lanes in establishments, or for senior citizens to be given priority in queues to prevent them from waiting for extended periods.

Twenty-percent discount on the following goods or services:

1. Medicines and vaccines including those for influenza and pneumococcal diseases, and other essential medical supplies.

2. Professional fees of physicians, whether in hospitals, clinics or home health care services, including those of other licensed professional health workers providing health care services as endorsed by private hospitals or employed through home health care employment agencies.

3. Medical and dental services, including diagnostics and laboratory tests, whether such services are rendered in private hospitals, medical facilities, outpatient clinics and home health services.

4. Transportation such as fares on public land transportation, including buses, jeepneys, taxis, public rail services, as well as to air and sea travel within the Philippines.

5. Accommodation and recreational services when staying in hotels, dining in restaurants, or using recreational facilities like cinemas, theaters and concert halls. In some municipalities, senior citizens are entitled to free entrance fees to theaters and parking areas.

6. Funeral and burial services for the death of the senior citizen, which covers the purchase of casket or urn, embalming, hospital morgue, transport of the body to intended burial site in the place of origin but shall exclude obituary publication and the cost of the memorial lot.

The VAT exemption on the foregoing sale of goods and services to senior citizens has also been codified in the National Internal Revenue Code (Tax Code), pursuant to RA 19063, the Tax Reform for Acceleration and Inclusion or the Train Act.

RA 9994 also grants senior citizens a 5-percent discount on utility bills, for consumption that does not exceed 10 kilowatt-hour for electricity and 30 cubic meters for water. The utility accounts must be under the senior citizen's name.

Other benefits

Other benefits include:

(a) exemptions from training fees for socioeconomic programs,

(b) free medical and dental services in all government hospitals and clinics, including diagnostics and laboratory tests,

(c) free vaccinations against the influenza virus and pneumococcal disease for indigent senior citizens,

(d) a monthly stipend in the amount of P1,000 and (e) death benefit assistance of at least P2,000 to the nearest surviving relative of a deceased senior citizen.

Interestingly, RA 9994 also provides educational assistance to senior citizens who wish to pursue post-secondary, tertiary or vocational education, whether in a public or private school, through scholarships, financial aid, subsidies and other incentives. This includes learning materials such as books and uniforms. Thus, it is never too late for senior citizens to go back to school and earn a diploma.

RA 9994 further mandates the continuation of benefits to senior citizens from the Government Service Insurance System, Social Security System and Pag-IBIG "to the extent practicable and feasible."

Another law, RA 10645, provides that all senior citizens are automatically covered by PhilHealth, even if they have not made prior contributions.

These laws reflect the government's commitment to protecting and enhancing the welfare of senior citizens in the Philippines. However, there was a question as to whether or not the mandate of all those benefits, which in the end are shouldered by the establishments providing the aforementioned services and goods, are constitutional.

The establishments granting the 20-percent discounts are entitled to claim the same as income tax deductions, not as tax credits. Unlike a tax credit, a tax deduction does not offer full reimbursement of the senior citizen discounts granted. As such, it raised the question whether the state, in promoting the health and welfare of a special group of citizens, can impose upon private establishments the burden of partly subsidizing a government program.

In several decisions, the Supreme Court has ruled that the grant of 20-percent discount and the tax deduction scheme is a valid exercise of the police power of the state. The Supreme Court also recognized that the duty to care for the elderly and the disabled lies not only upon the state but also on the community and even private entities.

Source: Business World

Sun Life survey highlights inflation challenges for retirees in Asia

Retirees in the Philippines are struggling financially amid high inflation, according to a Sun Life Asia survey.

Many of them lament past financial decisions, citing inadequate savings, poor investment choices and early retirement as key sources of regret.

Results of the survey, "Retirement Reimagined: Facing the Future with Confidence" — comprising 3,500 respondents across Asia, including the Philippines — showed 73 percent of Filipino retirees regretted not saving enough, 47 percent wished they had invested more wisely and 38 percent felt they retired too early.

A significant 25 percent said they have been caught off guard by the high cost of living, with 77 percent citing increased general living expenses and 46 attributing it to health care costs.

Despite efforts in savings, the Filipino participants admitted failure in financial preparation. While a number of them managed to save at least 10 percent of their income for retirement, 37 percent said they did not save at all and 21 percent did not foresee their retirement expenses, forcing them to cut back on spending or seek financial support from their respective families.

Inflation has worsened the situation. The Philippines is suffering more from high inflation rates than the Asian average, the survey said.

Consumer price growth hit a 14-year high of 8.7 percent in January 2023, which led the Bangko Sentral ng Pilipinas to tighten its monetary policy.

To date, inflation has settled within the 2.0- to 4.0-percent target range of the central bank at 3.4 percent and the average core inflation to around 2.4 percent, following the four-year low of 1.9 percent in September.

Carla Gonzalez-Chong, Sun Life Philippines chief client experience and marketing officer, stressed the value of financial literacy in addressing these challenges.

"Financial literacy remains key," she said. "We are committed to this advocacy to help more Filipinos overcome the obstacles and enjoy quality lives in their golden years."

The survey also revealed a growing trend among young Filipinos to delay retirement in response to rising living expenses.

Some expect to retire at an average age of 65, significantly later than the current retirees' average of 58. Many younger workers have postponed their retirement plans, with 59 percent citing the necessity of sufficient savings and 46 percent mentioning the demands of covering for increasing expenses.

Source: Business World and Sunlife