MANILA, Philippines - State agencies ended last year with the fastest disbursement rate in at least two years, generating optimism on economic growth which will be reported on Thursday.
According to data from the Department of Budget and Management (DBM), state departments and offices have utilized 95 percent of their notice of cash allocations (NCA) by December last year.
This was up from just 90 percent a year ago and the 93.89 percent in 2013. Additional DBM data are yet to be available as of this posting.
NCA issuance marks the final step in withdrawing state funds. Once an NCA is utilized, disbursements are automatically recorded in the government balance sheet.
"The latter part of 2015 saw agencies spending better across-the-board," Budget Secretary Florencio Abad said in a statement on Wednesday.
From January to December, a total of P1.77 trillion of P1.865 trillion in NCAs have already been used. The budget last year totaled P2.606 trillion.
Broken down, departments and offices recorded an NCA utilization rate of 94 percent, while the rate for budget support to state corporations and local government units hit 99 percent.
"There is still a portion of the prior year's budget which gets disbursed in the current year," Budget Undersecretary Laura Pascua clarified in a text message.
This is because there were allocations already obligated last year, but are yet to be disbursed. Under the law, they could be funded by the current year's budget.
Nicholas Antonio Mapa, economist at Bank of the Philippine Islands, said growth likely benefited from good spending numbers, although not that much.
"There was a big jump on spending in the third quarter so I think the additional boost for the fourth quarter could be the same or slightly lower," Mapa said in a phone interview.
Growth, as measured by gross domestic product, was revised to 6.1 percent from 6 percent in the third quarter. Nine-month expansion was still at 5.6 percent.
"Beyond the numbers, what is more interesting is the quality of spending. I don't think they were able to spend so much for development for the past five years," he added.
In November, for instance, maintenance and operating expenditures grew the fastest at 34.8 percent, followed by capital outlays at 32.3 percent, DBM data showed.
"They have been saying that it takes time to roll these projects out, but nothing has changed. They've been strict on utilizing public funds, but being strict does not mean you will not spend at all," Mapa said.