Budget utilization rate at 94% as of Oct, says DBM
MANILA -Government agencies were able to utilize 94 percent of cash allocations to them as of end-October, boding well for the Marcos administration’s efforts to address underspending concerns.
This means the national government, local government units (LGUs) and state-owned corporations were able to use P3.39 trillion out of P3.6 trillion in notice of cash allocations released to them in the first 10 months of the year, data from the Department of Budget and Management (DBM) released Wednesday showed.
The end-October budget utilization rate was unchanged from the rate recorded in the same period last year, when government agencies utilized P3.36 trillion of NCA releases amounting to P3.56 trillion.
Meanwhile, unused cash allocations totaled P209.47 billion during the period, larger compared to the P202.91 billion that state agencies failed to utilize a year earlier.
READ: DBM chief to gov’t agencies: Use budget in full or face cuts
An NCA refers to quarterly authority given by the DBM to agencies to withdraw money from the Treasury to fund their programs and spending requirements.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said budget utilization of government agencies would likely pick up in the remaining months of the year amid efforts to catch-up on spending.
“There is still a need to accelerate government spending in order to contribute more to economic growth going forward, after some government underspending earlier in 2023,” Ricafort said in a Viber message.
Data showed government spending grew 6.7 percent year-on-year in the third quarter, reversing the 0.7-percent slump in the preceding three months.
That growth was responsible for 36 percent of the faster-than-expected gross domestic product (GDP) expansion of 5.9 percent in the third quarter, picking up the slack from weakening consumer spending, a traditional growth driver.
Secretary Arsenio Balisacan of the National Economic and Development Authority (NEDA) last week said government spending still has room to grow and significantly contribute to growth in the fourth quarter, adding that the Marcos administration’s 6 to 7 percent growth ambition this year remains “doable”.
READ: Balisacan: State spending still has room to grow
Breaking down the new report, departments used 92 percent of cash allocations to them as of October, with the Commission on Audit being the only agency that posted a 100 percent utilization rate.
Meanwhile, state-owned companies posted a cash utilization rate of 99 percent while LGUs have so far used up 100% of NCAs issued to them.
