DBM looks at how to improve absorptive capacity of government units

MANILA, Philippines - The Department of Budget and Management (DBM) is looking at how to improve the absorptive capacity of the different government agencies to maximize the early release of the budget provided by the government.

Budget and Management Secretary Florencio Abad said there is a need for agencies to improve their absorptive capacity and implement programs faster.

This as first quarter spending fell below the program despite the early release of P834.2 million or more than half of the P1.645-trillion budget for the year.

Abad said that because of the slow disbursement of the budget in the first quarter the government needs to streamline agencies’ operations.

“We also need to streamline agencies’ operations and procedures to accelerate project implementation and to address issues on absorptive capacity, so that program and project execution will be accelerated,” he said.

He said agencies have to make sure that they comply with transparency and accountability requirements and the mandatory disclosure of budget information on their respective websites.

Disbursements in the first quarter of this year reached P349.3 billion, P82 billion or 19 percent lower than the programmed level. This happened even as the DBM already frontloaded the release allotments worth P834.2 billion or 51 percent of the total P1.645-trillion obligation program for 2011 as of March.

On a year-on-year basis, first quarter spending was lower by P50.7 billion or 13 percent lower than the P400 billion recorded last year.

Furthermore, DBM data showed that the agency’s utilization of Notices of Cash Allocation (NCAs) as of March amounted to P211.3 billion, or only 82.1 percent of the P257.2 billion issued.

Abad said the DBM would be consulting with key agencies to identify the bottlenecks in the implementation of programs.

“We have already scheduled a series of consultations with key agencies to help them accelerate the implementation of programs and projects,” he said.

He said that agencies had to review their cost assumptions so that programs and projects they will implement reflect more realistic costs,” he said.