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Manila Bulletin devider Philippines devider National devider Gov't on track to recover from underspending—DBM

Gov't on track to recover from underspending—DBM

Published Aug 24, 2023 06:47 am

At A Glance

  • The Department of Budget and Management (DBM) is optimistic about the government's recovery from underspending in the first semester.<br>Historical trends indicate that government agencies tend to disburse funds more quickly in the second semester.<br>Despite a P170.5 billion shortfall from January to June, the DBM believes the full-year spending target is achievable.<br>In 2019, underspending of P125.8 billion in the first semester was overcome with improved disbursement performance in the second semester.<br>The Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) played a significant role in recovering from delays in program and project execution.<br>The recovery was attributed to proactive measures taken by the two infrastructure departments.

The Department of Budget and Management (DBM) said the government is fully capable of recovering from its underspending in the first semester, supported by historical trends demonstrating increased disbursement by agencies in the second semester.

Based on the latest budget assessment report, the DBM said the national government is firmly committed to attaining the full-year spending target for the remainder of the year despite the P170.5 billion shortfall in the first half.

“Based on historical trends and agency spending behavior, disbursements quicken beginning the third quarter and go full steam during the fourth quarter,” the DBM stated in the report.

To illustrate, the DBM cited the case of 2019, wherein the delayed passage of the national budget led to a P125.8 billion underspending in the first semester.

Nevertheless, DBM said there was a notable improvement in disbursement in the second semester, exceeding the program by 28.1 billion or 0.7 percent by the end of the year.

The DBM said the recovery was driven by the effective measures taken by the government’s main infrastructure agencies, the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr).

According to DBM, DPWH, and DOTr addressed the delays in program and project execution encountered in the first two quarters of 2019.

Earlier this month, Budget Secretary Amenah F. Pangandaman released a DBM circular instructing government agencies to submit their spending catch-up plans by Sept. 15, 2023.

As per the DBM's directive, the submission should include an evaluation of project performance in relation to set targets and a comprehensive strategy for addressing any delays in delivery and execution.

Additionally, agencies are required to provide the DBM with an updated list of their financial and physical accomplishments, along with progress updates on flagship programs. They must also outline their plans to meet the spending targets for the year.

“To stimulate the economy, meet growth targets, and uplift the lives of Filipinos, it is crucial that agencies collaborate in addressing underspending and enhancing budget utilization,” Pangandaman said.

“We require the full cooperation of all stakeholders to ensure that every peso in our national budget is spent effectively and efficiently,” she concluded.

The economy recorded a modest growth rate of 4.3 percent in the second quarter, short of the 6.4 percent gross domestic product (GDP) recorded in the first quarter of 2023.

Notably, public spending contracted by 7.1 percent, a reversal from the 6.2 percent growth observed in the first quarter and the 10.9 percent expansion recorded a year ago.

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