The Department of Budget and Management (DBM) said Thursday that it was working on fast-tracking disbursements this year, as government spending on vital infrastructure such as roads, highways and bridges slowed by almost a fourth last year.
In a report, the DBM said the widest spending deficit in 2014 was posted in infrastructure and other capital outlay, as the actual disbursements worth P276 billion were lower by P89 billion or 24.4 percent than the program of P365.2 billion.
The DBM attributed the slower spending on infrastructure mostly to low notice of cash allocation utilization rates of the Department of Public Works and Highways (76.9 percent) and Department of Transportation and Communications (67.6 percent).
The two agencies also had lower obligation rates last year of 69.3 percent (from 90.6 percent in 2013) and 58.2 percent (from 66.9 percent), respectively.
In a statement, Budget Secretary Florencio B. Abad said the DBM “is already addressing spending efficiency issues among major implementing agencies, many of whom were unable to make full use of their respective budgets in the previous fiscal year.”
Anemic government spending last year, mainly due to the “chilling effect” of a Supreme Court decision that the Disbursement Acceleration Program (DAP) meant to fast-track spending was unconstitutional, brought total expenditures to P1.982 trillion, or 13.3-percent below the P2.284 trillion programmed for the year.
This means that the government did not spend as it should to support the investments required to sustain economic growth.
Slower spending on public goods and services coupled with a double-digit jump in revenue collections narrowed last year’s budget deficit to P73.1 billion, equivalent to just over a fourth of the 2014 program.
“2014 was a hard lesson on public spending. The government was certainly challenged in ways that few had foreseen, particularly in the wake of Yolanda. The high court rulings on the Priority Development Assistance Fund and DAP likewise affected our spending levels. However, we found out that poor agency capacity was actually the most serious roadblock to efficient spending. We’re working closely now with agencies to help them make the most of their yearly budgets,” Abad said.
The Budget chief blamed “capacity weaknesses within agencies and government-owned and -controlled corporations or GOCCs, which prevented them from fully utilizing their notice of cash allocations” as having accounted for almost half of last year’s spending deficit.
The specific problems in disbursement last year were difficulties in project implementation, poorly prepared projects, as well as problems in public procurement, according to Abad.
“Last year’s spending deficit helped us to correctly identify the issues that agencies had with implementing projects and conducting procurement procedures. As we refine agency spending processes and enhance their operational capacity, we can definitely look forward to faster and more efficient disbursements in 2015,” he said.