Aquino admin leaves over P1 trillion budget to Duterte

MANILA, Philippines — The Duterte administration was left with a budget of more than P1 trillion for agencies and departments when it took over last month, showing enough funds for planned higher spending later this year.

 

A total of P1.02 trillion worth of notices of cash allocation (NCA) were issued to state offices in the first half, data from the Department of Budget and Management (DBM) showed.

 

The figure accounted for 49.28 percent of the P2.07 trillion budget for departments and special purpose funds primarily used for support to local governments and state-run firms. This means a total of P1.05 trillion remains intact in national coffers.

 

The 2016 budget is worth P3.002 trillion. The balance of P930.7 billion is in the form of automatic appropriations allocated for debt payments, pension and grants and donations.

 

"Compared to 2010, they really have more money left now upon taking over. They should be proactive in disposing them," said Alvin Ang, economist at the Ateneo de Manila University.

 

NCA allows agencies to secure checks from the Bureau of the Treasury to pay for contracted services. Once checks are encashed, funds are deemed disbursed.

 

Of the P1.02 trillion NCA releases, 95.7 percent or P971.74 billion was actually converted into checks.

 

Broken down, P940.97 billion represented those redeemed as cash and spent, while P30.77 billion remained as checks as of June, data showed.

 

The balance of P47.33 billion remained with agencies which have not secured checks for their services.

 

"The problem encountered by the previous administration was more of capacity by agencies to absorb the budget. That could be one reason why there is a lot of money remaining," Ang said by phone.

 

Emilio Neri Jr., lead economist at the Bank of the Philippine Islands, agreed but said there was already "big improvement" since January.

 

According to DBM data, NCA utilization rate was at a much slower 74 percent in the first month of the year.

 

"This is positive, especially for economic growth in the second quarter. Although, we are still looking at a slowdown in the second half as the new government adjusts," Neri said by phone.

 

"There could be some review of projects and line agencies may have to deal with it," he added.

 

The Duterte government is targeting a higher budget deficit equivalent to 2.5 percent of economic output this year from 2 percent originally. But Budget Secretary Benjamin Diokno earlier said this would likely come more from a shortfall in revenues than bigger spending since the budget had already been programmed.

 

"They may still encounter the same problems in budget absorption," Ang said.