Agencies blamed for underspending of COVID-19 funds

FILE PHOTO: Budget Secretary Wendel Avisado. INQUIRER / NINO JESUS ORBETA

MANILA, Philippines — Despite agencies’ underspending of funds intended for COVID-19 response, the Department of Budget and Management (DBM) on Friday said all budgets set aside for 2021 needed to be spent within the year and cannot be used as election kitty.

The DBM said the same was true with the about P160-billion for-later-release appropriations in the P4.51-trillion 2021 national budget, which some senators alleged could be realigned into the administration’s campaign war chest for next year’s presidential polls.

Speaking before a virtual forum ahead of President Rodrigo Duterte’s final state of the nation address (SONA), Budget Secretary Wendel Avisado said the COVID-19 response funds and for-later-release budgets intended for social amelioration programs as well as infrastructure projects were intended “for the people, not for next year’s elections.”

As such, Avisado said these funds ideally should be spent this year. In a statement, the DBM said among the for-later-release items included P158.36 billion under the Department of Public Works and Highways’ (DPWH) budget, of which P144.81 billion were already sought for presidential approval before the DBM releases the money.

Unlike regular budget items, the DBM since last year put in place for-later-release appropriations for some programs and projects which must be supported by a special budget request and additional documents before releasing the money to implementing agencies. These for-later-release items had been suspected to be legislators’ “pork” which did not belong to the President’s spending plan.

As for COVID-19 response funds which came from the Bayanihan 1 and 2 Laws plus regular items from the 2020 and 2021 national budgets, Avisado said a total of P665.72 billion were released to departments and agencies as of June 25.

Of these releases, P562.18 billion or 84.5 percent had been obligated for programs and projects which implementation was expected to push through since the deals with contractors had already been sealed.

However, only P497.07 billion had been spent among these COVID-19 releases to date. While actual disbursements accounted for 88.4 percent of obligations, the balance of P168.65 billion remained unspent so far.

Avisado said the DBM’s responsibility was only to release the funds, but the burden to implement programs and projects lay on departments and agencies.

The Budget chief said each agency had expenditure patterns which the national government cannot control. He was referring to bureaucratic red tape which slowed down procurement processes among agencies.

As such, the current sluggish spending “will be addressed by the implementing agencies themselves,” he said.

But Avisado said departments and agencies needed to use up all of their allotments, or else their underspending will weigh on their future budget proposals.

He noted that the DBM evaluates agencies’ budget utilization rate as well as their absorptive capacity to roll out projects, which in turn were the basis for approval of their proposed agency budgets.

Despite the slow expenditures to fight the prolonged COVID-19 pandemic, the national government was looking for additional funds from agencies’ savings to fund teenagers’ vaccination as well as the purchase of booster shots for next year.

Avisado said the Cabinet-level Development Budget Coordination Committee (DBCC) will meet next week to collate the 2020 savings coughed up by agencies under Administrative Order (AO) No. 41 issued by President Duterte last May.

As of end-June, the DBM released P3.83 trillion or 85.1 percent of this year’s budget. A balance of P261.05 billion will have to be released before yearend.

At the end of the first half, “releases to line departments amounted to P2.38 trillion, equivalent to 90.1 percent, and is a marked improvement from last year’s 79.8-percent [released] during the same [six-month] period,” the DBM said.

“The DBM has fully released the respective allotments of most departments, including the P176.66-billion for-later-release appropriations of the Department of Social Welfare and Development (DSWD) for the implementation of its various social amelioration programs,” it added.