No front-loading done in first quarter, says DBM

Published by rudy Date posted on April 27, 2011

THE Aquino administration failed to front-load spending during the first quarter of the year as excessive scrutiny to bring down costs delayed project implementation, according to the Department of Budget and Management (DBM).

Secretary Florencio Abad told reporters that most agencies were unable to jumpstart their respective projects during the first quarter since most of their time was spent reviewing project costs.

“We did not expect that spending would not accelerate as we had thought it would,” Abad said on the sidelines of the 75th anniversary celebration of DBM Monday evening.

Because of this, the first quarter fiscal deficit would “certainly be below program,” he said.

“I think we will go below the programmed deficit [of P112 billion for the
first quarter]. Significantly below,” the DBM chief said.

Since the new administration’s thrust leans toward prudent spending, various agencies have been reviewing the cost assumptions of their projects, he said.

For example, the Department of Public Works and Highways spent the first three months of the year reviewing the project costs, he said.

“District engineers of both Budget and Public Works departments even had a seminar just so they can agree on the cost assumptions. We are optimistic that a significant level of savings would be generated once the cost assumptions have been reviewed,” he said.

“It is likely that the impact of the spending would be felt either in April or May. But you know the advantage of reviewing [the project cost assumptions] is that you get the same projects done at a lesser cost, so you can actually do more projects,” Abad said.

He said the P800 billion the DBM released in the first quarter of the year would not be reflected as spending until such time the agency concerned starts paying cash for the implementation of a project.

The P800 billion released at end-March is nearly half the P1.645-trillion full-year budget.

Earlier, Department of Finance Undersecretary Gil Beltran said prudent spending and transparency in the bidding across all government priority projects would translate to a better budget deficit than programmed for the first quarter of the year.

Beltran told reporters that it is “extremely unlikely” that the Aquino administration would exceed the P112 billion first-quarter deficit ceiling.

“We only had a deficit of P8.1 billion for the first two months and we never had a deficit of P100 billion in one month, and more especially so under this administration, which has been keeping a tight lid on expenditures,” he said.

“The government now spends only on essential and priority projects. It does not matter that you cut on spending for as long as you spend on the right things,” he said. “It is good that the bidding for government projects is very transparent, so you get the lowest price possible,” he added.

The official said that revenue performance for the period has been very favorable with both the Bureaus of Internal Revenue and of Customs surpassing their respective collection goals for the period, and thus raising the government’s chances of keeping its budget shortfall well within this year’s P290-billion deficit ceiling.

The full-year deficit cap is equivalent to 3.2 percent of the country’s gross domestic product (GDP). Last year’s deficit of P314.4 billion was equivalent to 3.7 percent of GDP.

GDP is the amount of final goods and services produced in the country. –KATRINA MENNEN A. VALDEZ REPORTER, Manila Times

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