The Philippines saw a sudden upturn in state infrastructure and other capital outlays in May as the government works to boost infrastructure spending. Plans for increased financial outlay on infrastructure are expected to boost the country’s steel demand significantly, but concerns remain over implementation, Kallanish notes.

State infrastructure and other capital outlays were up 38.1% from April to PHP 46.2 billion ($6.8 billion) in May, according to the Department of Budget and Management. That brought year-to-date spending to PHP 182.4 billion, up 8.1% year-on-year compared to just 2.6% growth over January-April. The department said the increase in spending was mainly due to completed road and flood control spending, although some was also due to the purchase of anti-submarine helicopters by the military.

The Philippine government has said that it plans to spend PHP 847.22 billion on infrastructure this year, and PHP 8.44 trillion over 2017-2022. Planned infrastructure spending in 2017 is around 5.32% of GDP, and in 2022 planned spending is expected to hit around 7.45% of GDP at PHP 1.9 trillion. Philippine steel demand is expected to increase to 30 million tonnes in 2030, up from 8.8mt in 2015, according to the Philippine Iron and Steel Institute.

However, some government ministers have admitted that they are realistically aiming to hit just 90% of targeted spending, and that may still be optimistic. A wide array of projects have been lined up, but analysts have question the suitability of some of the companies put in charge of projects. Many have been linked to political elites and their families and some have alleged that a significant part of the available funding could by syphoned off rather than being actually spent on projects.