Lower budget deficit seen with PDAF freeze

The government’s budget deficit for the full year may be lower than the ceiling by at least P14 billion, according to Budget Secretary Florencio Abad.

Abad said this was because of the Supreme Court order freezing the disbursement of Philippine Development Assistance Fund (PDAF), more popularly known as pork barrel.

Abad said there was still P14 billion left in this year’s national budget for PDAF, but the budget department was barred by the court, through a temporary restraining order, from disbursing the amount.

The freeze order came following reports that a big portion of the PDAF was diverted to ghost projects by nongovernment organizations controlled by Janet Napoles.

The government has set this year’s budget deficit ceiling at P238 billion or 2 percent of the country’s gross domestic product.

Last year, the deficit stood at P242 billion or 2.3 percent of the GDP.

“If the Supreme Court does not decide [within the year] on the TRO on PDAF, the remaining P14 billion in PDAF fund will not be disbursed and this will reduce the deficit,” Abad said in a press conference yesterday.

But Abad said the government intended to accelerate spending in the remainder of the year so that actual expenditures for the year would not be significantly lower than programmed.

For this year, the government has set an expenditure program of P1.98 trillion, up by about 15 percent from the amount spent last year.

The Department of Budget and Management acknowledged the need to ramp up spending in the remainder of the year because expenditures in the first half had been way below the ceiling for the period.

Government spending in the first half amounted to P890.8 billion, which was 12-percent short of the P945.7 billion programmed for the period.

The underspending in the first semester was partly blamed on the low absorptive capacity of some government agencies.

However, Abad said line agencies had been instructed to catch up with their spending targets.

He said the DBM had imposed a new policy providing for a one-year effectivity of approved expenditure items to encourage line agencies to spend their budgets on time.

This means that if a government agency fails  to spend its approved budget within one year, the fund will not be automatically available in the succeeding year.