Spending boost planned

A REPEAT of last year’s spending “stimulus” is being planned by the Budget department, which wants to realign government agencies’ unused funds for priority projects in the fourth quarter.

“[A]nother Disbursement Acceleration Program (DAP) is planned for implementation this year, based on the extent of appropriations which remain unobligated to date,” states a Budget department document, assessing its disbursement performance as of July, that was addressed to the Development Budget Coordination Committee (DBCC).

State agencies will have until end-September to obligate their budgets, it explained. After that, the department will collect unused funds and reallocate them for other projects, subject to President Benigno S. C. Aquino III’s approval.

Budget Secretary Florencio B. Abad has said that among the projects being eyed are access roads to tourist sites, support for agrarian reform credit facilities and aid for local governments that suffered budget cuts.

The DAP first made its appearance in October last year, initially amounting to P72.11 billion. In December, another P13.4 billion was added to the package, which was also called a stimulus after the government fell behind in its 2011 spending program.

The funds went to a wide array of projects such as flood control, weather forecasting, solid waste disposal, traffic management, irrigation, and roads and bridges.

The DAP also involved substantial subsidies for state firms like the National Housing Authority for resettlement projects, National Power Corp. for the firm’s fuel requirements and Philippine Health Insurance Corp. for premium payments. Lastly, it granted equity infusions to the Bangko Sentral ng Pilipinas and Home Guaranty Corp.

The DAP was a way for the Budget department to expedite public spending, the lack of which pulled down growth last year, as well as buffer the economy from the effects of the global slump. The government has since improved its disbursement performance significantly but it still remains some way below target.

State spending reached P957.961 billion as of July, up 15.1% from a year earlier. It was, however, just 52.1% of the full-year program with five months left to go. The government must now spend some P881.739 billion from August to December given its 2012 goal of P1.84 trillion.

Other than the spending package, meanwhile, the Budget department is also banking on other reforms to improve spending.

In the DBCC document, it reported that Account Management Teams were “already in full swing,” helping the largest agencies address bottlenecks delaying project implementation.

Mr. Aquino has also signed Executive Order 80, which promises hefty bonuses for government agencies — and their employees — that achieve performance targets for this year.

“As seen in the continuing rise in spending year on year, government efforts and measures to speed up expenditures are proving to be effective in achieving better budget utilization and more efficient delivery of goods and services,” the department said.

“[T]he government remains committed in sustaining the momentum gained in the recent months in improving and accelerating disbursements for the rest of the year.”

The Budget department also said that it had only P349.1 billion left of the P1.816-trillion 2012 national budget to disburse.

Government agencies will receive P169.5 billion, while P179.6 billion is earmarked for automatic appropriations such as interest payments, net lending and tax expenditures. –DIANE CLAIRE J. JIAO, Senior Reporter, BUsinessworld