Government picks up spending in August

MANILA, Philippines — The national government picked up the pace of its spending in the first eight months as line agencies started to shift its gears and implement catch up measures to offset the impact of the 2019 budget delay, the Department of Budget and Management (DBM) reported yesterday.

According to the latest data from the DBM, government agencies utilized about P1.802 trillion worth of notices of cash allocation (NCA) from January to August, accounting for 92 percent of the P1.961 trillion NCAs released during the period.

While the total amount of NCAs used during the eight-month period was lower than the P1.811 trillion recorded last year, the DBM noted that the NCA utilization rate was still faster as compared to 86 percent in the same period a year ago.

Sought for comment, Budget Undersecretary Laura Pascua said the faster utilization of NCAs was a result of catch up measures that seek to help the government recover from the slowdown in spending in the first half.

“Agencies are finally shifting to catch-up mode after the delay of the passage of the budget. Hence, we are beginning to see substantial growth in disbursements from key departments, like the DOTr, DA, DepEd, and DPWH,” Pascua said in a text message, referring to the Department of Transportation, Department of Agriculture, Department of Education, and Department of Public Works and Highways, respectively.

NCAs refer to the disbursement authority issued by the DBM to cover the cash requirements of government agencies. A higher NCA utilization rate demonstrates the capacity of line agencies to timely disburse their allocated funds and implement their programs and projects.

Based on DBM data, line agencies utilized P1.303 trillion or 89 percent of the P1.457 trillion NCAs released to them in the first eight months.

Cash allocations utilized for budgetary support to government-owned and -controlled corporations reached P98.79 billion, while NCAs used by local government units reached P399.95 billion.

The government was forced to operate under a reenacted budget in the earlier part of the year due to the delay in the passage of the 2019 General Appropriations Act. This led to a slowdown in government disbursements in the first half of 2019.

The economic cluster of the Duterte Cabinet, therefore, came up with a spending catch-up plan to ensure that its disbursement targets are met.

According to the DBM, government spending has started to normalize last July, with total disbursements growing by 3.4 percent to P339.4 billion from P328.1 billion a year ago.

The agency also said disbursements are expected to pick up as the expenditures of the DPWH and DOTr will be heavily concentrated in the second semester of the year.

“This, along with the allotment releases in August, can therefore propel government spending in the second semester with the completion and/or partial completion of infrastructure works and corresponding progress billings,” the DBM said.