Early budget releases to speed up priority projects?

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As of end January 2013, the budget department has released almost 92% of the total P977.7 billion budget

MANILA, Philippines – The country should expect earlier implementation of the priority programs and projects of the executive departments with the early release of the budget.

As of end-January 2013, the Department of Budget Management (DBM) released almost 92% of the total P977.7 billion budget allocated to departments and agencies.

DBM Secretary Florencio Abad also confirmed that a total of P1.26 trillion of the national budget was released just before February stepped in. This is equivalent to 62.8% of the P2 trillion budget for the fiscal year 2013. 

The released budget in January is 39.6% higher than the total allotment level made in the same period last year.

Accelerated implementation 

The early releases are in line with the government’s plan to step up the completion of programs and projects.

“With 92% of their budgets already released to them, departments can commence their procurement activities in the first quarter and, consequently, speed up project execution ahead of the election ban,” Abad said.

The budget chief also said that the fast budget release would allow departments and agencies to comply with the policy of one-year validity for all appropriations.

DPWH AS PRINCIPAL INFRA AGENCY. One of DPWH’s current project is the completion of the Aluling Bridge, building of which dates back in 1978. The government aims to speed up project implementation by designating DPWH as the principal infrastructure agency. Photo from DPWH website

DPWH as principal infrastructure agency

In line with their plans of accelerating the implementation of projects, the government designated the Department of Public Works and Highways (DPWH) as the principal infrastructure agency, fast-tracking target plans for 2013. 

This means that DPWH is responsible for the timely implementation of critical infrastructure projects. This includes classrooms, rural health facilities, bridges for agrarian reform communities, and tourism access roads.

As early as January, 84% of the projects under DPWH have been bidded out and 32% have been granted notices to proceed.

Also, more than half of the funds allocated to DPWH have been issued, along with the budget released as of end-January.

“We expect more NTPs  (notices to proceed) to be issued within the first and second quarters. Additionally, the fund requirements for projects with approved contracts have already been obligated by the DPWH. This will guarantee the faster delivery of key infrastructure services to the public, particularly during the first semester of the year,” Abad said.

Increased MOOE

Abad also noted that the budget released for Maintenance and Other Operating Expenditures (MOOE) increased by 86.8% from last year. This can be attributed to the full release of the requirement for the Internal Revenue Allotment (IRA) to the local government units (LGUs), accounting for P302.3 billion of the budget released as of end-January.

In the previous years, IRA was distributed to local governments on a quarterly basis.

“Because their shares were released comprehensively this year, our local governments can now obligate their budgets well in advance and create more legroom for efficient service delivery to their respective constituents,” Abad said.

Learning from the past

If we must learn from the past however, an early release of the budget does not necessarily guarantee fast implementation of priority projects, former DBM secretary and economics professor Benjamin Diokno said in an article published in “Per Se,” an online compilation of articles and research by economists from the University of the Philippines.

Referring to the 2012 budget implementation, Diokno said that “in most cases, the delays were clearly the fault of line departments.” He pointed to the non-implementation of the following: building of new school buildings, improvements in airports and seaports, reconstruction of old roads, improvement of agricultural infrastructure, and increase in the efficiency of power supply.

“The release of budget allotment is a necessary but not sufficient condition for speedy program and project implementation. One still needs managerial ability, adequate manpower and administrative capacity on the part of the agency concerned,” Diokno pointed out. – with reports from Raisa Serafica/Rappler.com

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