The Department of Transportation (DOTr) committed to disburse its budget fast after the Senate Plenary approved the agency’s P120 Billion 2022 budget this Monday.
“While the proposed budget for next year is lower than what the DOTr has outlined in previous presentations and coordinations, we nevertheless commit to the fullfilllment of its mandate in the remaining term of office with whatever approved budget will be made available,” remarked DOTr Undersecretary for Finance Giovanni Lopez.
On the matter of faster budget disbursement, the DOTr was one of five line agencies which the Department of Budget and Management (DBM) cited for accelerated budget utilization in the first nine months of 2021.
“To cover the cash requirements of agencies’ programs, operations and projects, the DBM issues Notices if Cash Allocation (NCA) to government-servicing institutions such as the Development Bank of the Philippines, Land Bank of the Philippines and Philippine Veterans Bank.
NCAs are valid until the end of the quarter in which they were issued,” according to the DBM report.
The NCA utilization rate reflects the line agencies’ ability to release funds and deliver programs and projects on schedule.
“Five agencies that used their entire allocation for the period were Department of Transportation with P45.88 billion; the Judiciary with P31.41 billion; Civil Service Commission with P1.28 billion; Commission on Audit with P9.20 billion; and Office of the Ombudsman with P3.09 billion,” the report stated.
In 2015, the disbursement rate was at 47.86 percent (over allotment).
In 2016, the DOTr had 60.77percent but it dropped again in 2017 (38.57percent) as most projects were still for bidding at that time.
In 2018, it had 40.38 percent. This was the year when the agency started with the “no advance payment” policy.
Notably, the DOTr is the only direct line department that was cited by the DBM in its report.
This shows how fast and efficient the DOTr has been using its budget, given the setbacks due to the COVID-19 pandemic.
In 2019, the DOTr’s disbursement rose to 74.5 percent but it dropped to 64.57 percent in 2020 due to the COVID-19 pandemic.
As of September 2021, the agency’s disbursement rate was already at 63.15 percent.
Meanwhile, the DOTr’s perceived low disbursement rate is largely due to 3 factors.
First, the disbursements reflected in the Financial Accountability Report (FAR) No. 1 do not include loan proceeds disbursements which get booked-up/recorded only upon issuance by DBM of the Non-Cash Availment Authority.
To date, the DOTr is yet to receive our requested NCAA from DBM totalling around P75 billion which represents our loan proceeds disbursements for this year and even for prior years’ dating back to 2018.
Second, as a measure to ensure that no payment is released for infrastructure projects contracts without corresponding accomplishments, DOTr; in 2018, has instituted the no “advance payment” policy, particularly, for locally-funded projects.
Hence, contractors get to be paid only once they have achieved at least 20 percent physical accomplishment.
Third, there were also delays in the release of the DBM of the Notice of Cash Allocation (NCA) for all GOP disbursements.
Particularly affected by this are locally-funded projects disbursements, which, although already needed for progress billings settlement or fund transfers to our implementation partners, had to be put on hold pending receipt of their covering NCAs.
Proof of the DOTr’s efficient utilization of available NCAs is the recent report published by the DBM which recognized the DOTr as one of the top performers in terms of NCA utilization.
According to the DBM report, the DOTr has a 100 percent rate of NCA utilized vis-a-vis the amount of NCA released.