Gov’t spending in Q1 lower than programmed

MANILA, Philippines—The government spent less than programmed in the first quarter of the year, according to the Department of Budget and Management.

Under the fiscal program for the first three months, the government was allowed to spend as much as P431 billion for projects and programs of line agencies and salaries of state workers.

Budget Secretary Florencio Abad said the government spent much less than P431 billion in the first quarter, as government agencies were told to conduct a review of the costs of their projects to see whether there was room for reduction. The review required time, so implementation of certain projects was moved to the next quarter, he said.

“Take DPWH (Department of Public Works and Highways) for instance. The agency had to spend practically the whole of the first three months to review their project costs,” Abad told reporters at the sidelines of the 75th anniversary celebration of the Department of Budget and Management on Monday.

Given this, the budget chief said, spending was slow in the first quarter but it was expected to accelerate in April to June, when the several projects would be implemented.

Abad said the lower-than-programmed spending in the first three months was expected to have contributed to the below-ceiling deficit of the government for the period. He said a lower deficit was not only a doing of higher-than-expected revenue collection.
The government set the deficit ceiling for the first quarter at P112 billion, but officials said the actual figure could be less than the P64 billion posted in the same period last year.

Official deficit data for the first quarter would be released by the Department of Finance this week.

The reassessment of costs of ongoing projects is part of the zero-based budgeting (ZBB) system implemented by the Aquino administration. Under this, no ongoing project is automatically allocated a budget. Instead, the costs of even of ongoing projects will have to be reassessed first before they are given funding.

This is in contrast with the old system wherein ongoing projects are automatically allotted funding, the amount was based on what was originally approved.

Although the ZBB system may allow government to generate savings and help reduce corruption, critics said the system might result in delays in project implementation.

However, Abad said the savings to be are generated would enable the government to fund more projects than scheduled.

“The advantage of reviewing [the costs of projects] is that you get the same projects done at less cost. Consequently, you can do more projects,” he said.

Abad said the government intended to significantly increase spending in the second quarter to make sure projects and programs lined up for the year were implemented.

“We may expect spending to accelerate in the coming months,” he said. Abad added that as a result, the budget deficit for the second quarter might be bigger than the gap in the first quarter.