Budget Secretary Florencio B. Abad is blaming the Supreme Court decision that declared the Disbursement Acceleration Program (DAP) as unconstitutional to the economic slowdown in the third quarter at 5.3 percent that led to the reduction of government spending in infrastructure projects.
Abad said, however, that the administration is now counting on the special purpose funds, considered by critics as lump-sum allocations or pork barrel, to be the main source of public spending for infrastructure.
“We are addressing these issues by reviewing the quarterly lapse period for NCAs (national cash allotments), with the possibility of shifting this to a monthly basis. Likewise, we estimate that disbursements for the fourth quarter will accelerate by 6.7 percent with the release of appropriations from the special purpose funds, as well as other items that need the submission of special budget requests and documentary requirements,” Abad said in a news statement issued on Thursday.
He said these include the Basic Educational Facilities under the Department of Public Works and Highways, the Rehabilitation and Reconstruction Program, the National Disaster Risk Reduction Management Fund, and the Department of Agriculture’s farm-to-market road projects.
He added that the “even and steady pace of our economic expansion already defies some very formidable difficulties, including the devastating effects of Yolanda and other recent disasters in the country, as well as the continuing instability and volatility in the international market.”
Abad said the Department of Budget and Management will step up government spending after public expenditures contracted by 2.6 percent in the third quarter. “It must be mentioned that uncertainties in the wake of the High Court’s decision on the DAP played a crucial role in this development, as the ruling may have sent a chilling effect across the bureaucracy’s expenditure practices. At the same time, some budget reforms we’ve put in place—exactly those designed to make the budget more transparent, accountable and open—increased the requirements that agencies and departments had to comply with before their funds could be released,” he said.
“However, we’ve also made careful note of the progress we need to make in public construction in the fourth quarter, given the 6.2-percent slowdown in the sector from July to September this year. Procurement issues have certainly affected the pace of public construction activities in the last quarter, apart from the additional requirements imposed by the implementation of the 2014 General Appropriations Act,” Abad said.
Abad said despite the strong global commitment to assist the Philippine government, the Aquino administration cannot implement the stimulus for the massive Yolanda rehabilitation and reconstruction projects.
He said that since 2011, the government grappled with some very serious spending contractions, including those in public construction, where shortfalls as low as -62.5 percent were recorded.
“We believe, too, that these challenges are plainly instructive; we must consider these alongside our broader successes as we implement the budget with greater purpose and efficiency in the last quarter. The national budget, after all, must always be in the service of the Filipino people. We will not lose sight of that.”
Rosy Palace outlook in Q4
Malacañang struck a confident note on Thursday, even as the country’s gross domestic product grew by only 5.3 percent in the third quarter, posting a 1.7-percent drop from the 7-percent growth recorded during the same period last year, with Palace officials counting on a rosy economic outlook for the rest of 2014.
“Empirically, the Philippine economy is still the fastest-growing in the region,” Communications Secretary Herminio B. Coloma Jr. said in a news briefing.
He told reporters that the Office of the President affirms the National Economic and Development Authority’s (Neda) “continuing positive outlook in the succeeding quarters and onward to 2015.”
Coloma pointed out that “private sector performance is expected to remain robust. Government spending is likely to improve and the impact of the post-Yolanda reconstruction efforts will gain further traction.”
This, after he acknowledged a Neda report that the Philippine economy, as measured by GDP, grew by 5.3 percent in the third quarter of 2014, adding that this showed a 1.7-percent decrease from the 7- percent growth recorded during the same period last year and 1.1 percent lower than the 6.4 percent registered in the second quarter of 2014.
“According to Secretary Balisacan, the third-quarter economic performance shows a mixed picture of the private sector treading a more stable upward trajectory, government adjusting to new spending protocols, and the lingering negative impact of Typhoon Yolanda and other calamities,” Coloma added.
Reminded that the Neda chief had also voiced concern over the adverse effects of the Manila port- congestion problem on the economy, Coloma said Cabinet Secretary Jose Rene D. Almendras is convening a “summit” of port area stakeholders to quickly address the problem in anticipation of the usually heavy volume of imported goods arriving during the Christmas season.
“Among others, there are constraints that the government has had to deal with and it is timely that this afternoon, Secretary Almendras will convene the summit, at which the proposals of the stakeholders to ease the problem of port congestion will be addressed, as we continue to find responsive solutions so that these constraints will be overcome,” Coloma said.
Estrella Torres