The Department of Budget and Management (DBM) on Wednesday reported the full year disbursements of the national government (NG) in 2017 amounting to P2.824 trillion, up 10.8 percent from 2016’s P2.549 trillion, with spending on infrastructure increasing by 15.4 percent for the year.
DBM data showed total disbursements for 2017 was 2.9 percent below the P2.909-trillion programmed disbursements for the year.
Infrastructure spending last year amounted to P568.8 billion, up 15.4 percent from 2016’s P493 billion. The figure exceeded by 3.5 percent the programmed P549.4-billion infra spending for the year.
The growth was attributed to the Department of Public Works and Highways (DPWH), citing the prompt and regular submission of progress billings from contractors; faster and simplified process of approval of plans and programs; and strict implementation of project planning, monitoring and scheduling as among the factors that pushed higher-than-programmed disbursements.
“The upward trend in capital outlays is proof of the rollout of the Duterte administration’s ambitious infrastructure program,” the DBM said.
Personnel services reached P808.4 billion or 11.8-percent increase compared to 2016’s P723.2 billion. Other expense items that contributed to the growth of 2017 spending include: subsidy contributions to government-owned and -controlled corporations amounting to P131.1 billion, which posted a growth of 27 percent from P103.2 billion in 2016; and the allocations and capital transfers to local government units amounting to P530.1 billion or 14.5 percent higher than the previous year’s P462.9 billion.
“Underspending, defined as the deviation of actual from programmed disbursements, has been cut down to 2 percent if interest payments [IP] were excluded and 3 percent if IP were included,” Budget Secretary Benjamin E. Diokno said.
Diokno added that line agencies of the government are in position for the landmark shift from multiyear obligations-based to annual cash-based budgeting in fiscal year 2019.
In January the DBM began conducting executive briefings with the national government agencies, including the departments of Health, Transportation, Education Agrarian Reform and the DPWH.
These came on top of the briefings conducted last July and August 2017 to introduce the Budget Reform Bill and annual cash-based appropriations.
In 2017 the DBM implemented the one-year validity of appropriations instead of the usual two years to push the agencies to speed up the execution of projects and prepare them for the transition to annual cash-based budgeting in FY 2019.
The shift to annual cash-based budgeting is a major component of the Budget Reform Bill being pushed by the DBM, with the bill aiming to modernize the NG’s budget process, eliminate underspending, and institutionalize many of the reforms introduced and currently being implemented by the Executive branch.
Shifting to annual cash-based budgeting is expected to speedup the government’s budget utilization and promote disciplined management of the budget. Also, as it shows disbursements rather than obligations or commitments, a cash-based budget tends to reflect more accurately the annual outputs and actions of the government.
In January the DBM already released 78.8 percent or P2.97 trillion of the P3.78 trillion of the 2018 national budget.
Furthermore, the recently released full-year data for FY 2017 showed a continuation in the decline in underspending, posting an underspending rate of 2.4 percent, if IPs are excluded from the computation to account only for productive spending.
In previous years, the underspending rate was as high as 13.3 percent in 2014, and 12.8 percent in 2015. This was significantly decreased to 3.6 percent in 2016, when the Duterte administration took over.
“Moving forward, we expect further improvement in government spending as the bureaucracy shifts to annual cash-based budgeting starting fiscal year 2019,” he added.
Image credits: Nonie Reyes