State firms improve budget use

MANILA, Philippines - Government agencies improved their capacity to spend the budget as of the third quarter, but nearly P1 trillion remained with them, leaving it at risk of being cancelled by the end of the year.

A total of P1.06 trillion in obligations had been entered into from January to September, accounting for 64.2 percent of budget allotments, data from the Department of Budget and Management (DBM) showed.

This was higher than the 59.58 percent cornered in the same period a year ago.

DBM officials did not respond to request for comment, but Budget Secretary Benjamin Diokno reiterated last week the agency’s commitment to step up spending.

“We have tweaked our fiscal policy to secure these ambitions...This will allow adequate funding for our expenditure priorities,” Diokno said in a speech during a forum in Makati last Nov. 29.

“But let me assure you that we will exercise fiscal responsibility. The planned deficit is manageable, appropriate, and sustainable,” he added.

The total budget for the year is P3.002 trillion. Obligated funds indicate that the money is scheduled to be paid out based on existing contracts.

That makes funding for such projects safe once a new budget takes effect next year. Funds that were not contracted, meanwhile, will be dropped.

As of the end of September, a total of P808.27 billion was merely allotted to agencies, which could be cancelled should they fail to obligate them by Dec. 31.

The Duterte administration vowed to speed up spending, especially in infrastructure, as it seeks to boost economic growth that hit seven percent for the first nine months.

According to DBM data, the Department of Public Works and Highways, the primary infrastructure agency, improved its absorptive capacity to 66.9 percent from 61 percent a year ago.

The Department of Transportation  also increased its budget absorption to 42.4 percent from 33.66 percent.

The figure included the newly-created Department of Information and Communications Technology, whose funding this year was sourced from various agencies under the old portfolio.

“Building infra, as you are aware, has the highest multiplier effect on the economy,” Finance Secretary Carlos Dominguez said during another forum held last Friday.