Who is ‘mishandling’ the budget?

Department of Budget and Management (X) Secretary Amenah Pangandaman has been breathing down the necks of the respective heads of various government agencies to ramp up the spending of their present Congress-approved 2024 budget. Currently going through the scrutiny of the 19th Congress, a total of P6.352 trillion for next year’s budget has been endorsed by President Ferdinand “Bongbong” Marcos Jr. to Congress for approval.

To ensure this momentum of the country’s 6.3 percent economic growth for the first half of this year, the Department of Public Works and Highways (DPWH) is getting the lion’s share of the proposed budget for next year. An allocation of P898.9 billion for the DPWH was provided under proposed 2025 General Appropriations Act (GAA) bill.

At the Kapihan sa Manila Bay news forum last Wednesday, Pangandaman hastened to clarify that education is one sector that actually still has the biggest allocation in the 2025 GAA bill. Added together with the Department of Education (DepEd) budget for next year, Pangandaman cited, the total allocations for the education sector amounted to a total of P977.6 billion. These include the Commission on Higher Education (CHED); the Technical Education and Skills Development Authority (TESDA) and state colleges and universities (SUCs).

When asked if this allocation for education sector included the controversial P10-million procurement of Isang Kaibigan books in the proposed 2025 budget of the Office of the Vice President (OVP), the DBM chief replied tersely: “No, it is not.” Intended for distribution to public school children, Vice President Sara Duterte requested to fund the book she supposedly authored, with her portrait and short bionote under the OVP’s P2.037-billion budget for next year.

VP Sara recently complained about the alleged “mishandling” of the 2024 budget as one of the “long list of reasons” why she resigned as DepEd secretary earlier this year. Now, Senate Deputy Minority Leader Risa Hontiveros vowed to push for the realignment of the P10 million requested, along with about P100 million in the OVP budget for 2025 for projects duplicated in other executive departments.

In response, the DBM secretary reiterated the position of the executive branch to “respect the wisdom of Congress if they want to make adjustments in the budget.”

Pangandaman has finished her presentation to both chambers of Congress on the 2025 GAA bill. Offhand, she expressed confidence the proposed 2025 GAA bill would be approved before the end of this year. Many of the incumbent lawmakers are set to file their certificates of candidacy by October this year while Congress adjourns sessions for their next recess. Speaking of recess, the present Congress is the number one in the DBM list of “under spending” of their 2024 budget.

Both the Senate and the House of Representatives recorded the lowest obligation rate as of end-June. Data from DBM showed allotment to Congress reached P50.24 billion in the first six months this year. However, it only obligated 8.8 percent, or P4.44 billion, during this period. “I think this is because of the seasonality of their operations. Congress goes into recess. So I think that affects (their spending),” she explained. Both chambers of Congress are not in session for at least a month three times a year.

The rest of the agencies with the lowest utilization rates include the Commission on Higher Education (19.2 percent); Department of Migrant Workers (22.1) percent; the Department of Human Settlements and Urban Development (24 percent); the Department of Energy (33.8 percent); Philippine Sports Commission (35.2 percent); Office of the President (37.1 percent); Department of Labor and Employment (37 percent); the OVP (39 percent); the Department of Justice (41.4 percent) and the DepEd (41.9 percent).

While VP Sara complained about supposed “mishandling” of the budget, both the OVP and the DepEd were among the top ten underspending agencies.

From the DBM record, DepEd has obligated P321 billion out of its total available appropriations this year amounting to P769.9 billion as of June 30 this year. She stepped down as concurrent DepEd secretary last July 19. But the DepEd has been able to disburse as much as P291.2 billion for the past six months. Thus, it posted the eighth highest disbursement rate of 93.3 percent.

The OVP, on the other hand, has obligated P826.6 million out of its total appropriations of P2.07 billion. Of this total budget, only P518 million have been disbursed, leaving P1.2 billion unused for the same period.

Pangandaman described “obligation rate” as a DBM measure on how much of the allotments, or funds released to an agency, were already obligated or contracted out to suppliers. In general, she cited, a low obligation rate means that funds available to an agency have not been committed yet, i.e., the agency has not yet entered into contract with suppliers for the delivery of certain goods/services.

“Usually, this stems from poor planning of programs/projects, coordination problems among oversight/approving authorities, LGUs and other stakeholders, as well as procurement difficulties (e.g., failed biddings),” the DBM chief explained.

The disbursement rate, on the other hand, determines how much of the obligations were actually paid, Pangandaman pointed out. “The delays or slippages in the implementation of agency programs, activities, projects (PAPs) may lead to underspending, as actual payments can only be made once goods are delivered or services are rendered,” she added.

Overall, Pangandaman reported 65.4 percent of the P5.768-trillion allotment for 2024 has been obligated as of June 30 this year. The five government agencies with the highest obligation rates are: the Office of the Presidential Adviser on Peace, Reconciliation and Unity (84.3 percent); the National Intelligence Coordinating Agency (80.4 percent); the DPWH (70.5 percent); the Department of Finance (69.9 percent) and the Department of Foreign Affairs (58.5 percent).

In general, she noted, state agencies still managed to post a better utilization rate in the first semester as the government moved to ramp up the implementation of PAPs. Infrastructure projects have the biggest multiplier effect to the country’s various economic sectors.

So who’s mishandling the budget?