Govt spending dismal despite release of over half of 2012 budget

MANILA, Philippines – Government agencies have the money to stir the economy, it’s just a matter of spending it.

Budget Secretary Florencio Abad said that as of April 30, they have released 69.2% or P1.26 trillion of the P1.816-trillion budget for 2012.

Despite this, public data showed the government’s spending performance was dismal in the first quarter.

In the said quarter, the government’s deficit was only less than half of what was programmed as spending fell below target.

The January to March deficit amounted to P33.909 billion, P48.899 billion lower than the programmed ceiling of P82.808 billion.

While spending of P394.883 billion improved from last year’s P349.275 billion, it was 45% below the target of P440.588 billion.

Government underspending, especially in infrastructure, was partly blamed for the drastic slowdown in gross domestic growth to 3.7% in 2011 from the previous year’s 7.6%.

Abad warned agencies of the repercussions of delaying budget disbursements. “Releases made by DBM (Department of Budget and Management) must be fully optimized, especially by the agencies that have already received them. Otherwise, the government’s overall expenditure performance suffers.”

Unreleased budgets

Of the P1.26 billion total releases as of April, P796.2 billion was released to all government departments, comprising 92.9% of the P856.9-billion budget appropriated for them.

Government releases under Special Purpose Funds also tracked a significant increase with 14.4% or P33.9 billion, up from the 5.8% release rate made at end-March.

The increase under Special Purpose Funds was due largely to releases made to cover the terminal leave and retirement gratuity benefits of retiring government employees, the third tranche salary increase under the Salary Standardization Law, and the subsidy requirements of government-owned or -controlled corporations, among others.

Releases under Automatic Appropriations also went up from 49.9% in March to 57.5% or P416.2 billion as of end April to cover Internal Revenue Allotments for January to December, interest payments and net lending requirements for January to March, and Retirement and Life Insurance Premiums.

Abad said only P262 billion or 24% of the 2012 General Appropriations Act is still unreleased.

“We enjoin all government departments not just to make the most of the releases, but also to submit documents and requirements that may be needed for the release of other funds. At least P61 billion for government departments are still unreleased, and agencies cannot secure these funds until they submit their special budget requests and other documentary requirements to the DBM,” Abad said. – Rappler.com