The money the government spent the immediate past five years had far more beneficial impact on the lives of Filipinos than money spent over 10 years ending 2010, according to the Department
of Finance (DOF).
Such funds, called capital expenditures (capex) by budget planners, generated far more return on investments (ROI) for the period of 2011 to 2015 than had been noted in the decade ending 2010, Finance Undersecretary Gil S. Beltran told the BusinessMirror.
Fiscal data show an ROI averaging 88 percent for each peso the national government spent as capex in the immediate past five years, versus ROI averaging no more than 72 percent in the decade ending 2010.
An ROI of 88 percent in this case simply means revenue gains posted by the collection arms of the national government proving superior to the gains-to-cost ratio of only 72 percent for the period of 2001 to 2010.
Beltran said fiscal planners prepared this year’s budget in which capex equaled 5 percent of local output measured as the GDP, the bulk of which had been set aside for the government’s infrastructure guildup program.
The rising capex numbers, also mean asset deployment in the public sector, has become more efficient with each passing of the year, Beltran said.
In an economic bulletin, Beltran, also chief economist at the DOF, said the capital outlay contributed more to economic growth via an 88-percent ROI for the period covered.
Beltran attributed the bigger positive impact to more open and transparent bidding processes, more stringent project selection, and to design and performance evaluation that leads to the more efficient implementation of capex.
Because of these anticorruption measures, Beltran said capex posted a rate of return of 88 percent, which redound to accelerated economic growth than the capex during the previous decade, which only had a rate of return of 72 percent.
Beltran said the next administration should continue the governance reforms which led to the higher rate of return on capex, instead of merely losing the money to corruption and to so-called inefficiency in the government.
“Reforms in procurement, project planning, and design and performance evaluation of national government agencies contributed to more efficient national government capital outlays. Such reforms should continue to be
implemented,” he said.
Meanwhile, the Department of Budget and Management (DBM) announced that the government allocated P6.5 billion to the nation’s budget for 2016 for the upkeep and repair of roads in 73 provinces throughout the country.
Budget Secretary Florencio B. Abad said the 73 provinces were chosen “based on compliance with good governance standards,” and were not politically motivated.
The P6.5-billion “Konkreto at Ayos na Lansangan at Daan Tungo sa Pangkalahatang Kaunlaran” program is said to be based on compliance with good financial housekeeping standards of the Department of the Interior and Local Government, the DOF
and the DBM.
Abad said the respective allocations of the 73 provinces were arrived at using a formula which took into account a number of performance and need-based criteria, such as utilization and completion of local road projects, and efficient use of maintenance funds for local roads.