DOTr underspends P12B due to policy shifts

Aika Rey

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DOTr underspends P12B due to policy shifts
Transportation Secretary Arthur Tugade clarifies that the department's low disbursement rate does not mean they were 'negligent'

PAMPANGA, Philippines – The Department of Transportation (DOTr) on Tuesday, July 17, described as “savings” the P12 billion they did not spend from their 2017 budget allocation, saying this came about due to “shifts in policy.”

According to the latest Commission on Audit report, the DOTr had committed to spend 80.9%, or P57.6 billion of its P71.2-billion budget, but it only got to spend 25.6% of its funds, or P18.23 billion.

Some P12 billion were reverted to Bureau of Treasury while close to P2 billion was extended to be used for the following year.

In a press briefing on Tuesday, Transportation Secretary Arthur Tugade clarified that the department’s low disbursement rate did not mean they were “negligent.”

“We were not able to utilize P12 billion from our funds, but it doesn’t mean to say that we weren’t able to [implement projects]. These are savings,” Tugade said during the briefing at the DOTr office in Clark, Pampanga.

“Secondly, we weren’t able to obligate 20% of our budget not because of negligence, but because of shifts in policy. These were reverted because there is no use for it anymore,” he added.

COA said that among the funds unspent by the  DOTr were some P213 million allocated electricity budget for the controversial 48 trains from China-based CRRC Dalian Company Limited. These trains remain unused. Another “savings” were the P279 million earmarked for operation of these trains. (READ: Dalian trains may be used later this year but…)

The DOTr also incurred savings of P102 million from the terminated maintenance service contract with Busan Universal Rail Incorporated (BURI) in November 2017, as it failed to address issues raised by the government.


State auditors pointed out that several projects were “put on hold” due to policy shifts. 

According to the report, 144 of 150 locally funded and all 9 foreign-assisted projects were “slowly” implemented. COA said that projects with less than 75% of its funds released within 2017 are “slow.”

State auditors attribute this slow release of funds to “changes in policy directions by political leaders and economic managers.”

DELAYED. This chart shows locally funded and foreign-assisted projects rate of fund disbursement. Graph from COA

An example of a project “put on hold”, COA said, is the Metro Manila Bus Rapid Transit (BRT).  The pending BRT project is an unobligated balance of P563.65 million, which was reverted to the Bureau of Treasury. 

The DOTr has since said it was considering scrapping the BRT project in Metro Manila, citing physical infrastructure constraints. (READ: DOTr to scrap bus rapid transit project)

“The BRT assumes a dedicated lane along EDSA. The current situation of 5 lanes is with that much traffic – maybe BRT is not the solution to [traffic] in EDSA,” Tugade said on Tuesday.

The transportation chief also said that the “delayed” projects have been in the pipeline of the previous administration, specifically citing the Metro Rail Transit and the Light Rail Transit common station in North Avenue.

“The common stations was delayed not because of us. We came in, and it has been delayed…Comparing speed of implementation, we’re not entirely delayed,” Tugade said.

The MRT-LRT common station has been delayed for a decade due to issues with contractors. It is scheduled to be operational by 2020.

To improve disbursement rates, Tugade said that they will “expedite in-house preparation for detailed engineering design for complex projects.” They will also reorganize DOTr’s project management office to ensure efficiency.

For 2019, DOTr is also looking at earlier procurement activities, so that projects are implemented prior to yearend. –

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at