Spending goals still a way off

PUBLIC SPENDING may have increased significantly as of July but the government still has a lot of ground to cover if it is to achieve full-year targets, Budget department data showed.

Capital outlays hit P148.7 billion in the January-July period, up 39% from the previous year. The figure, however, is just 39.72% of the P374.4-billion program for the year, with five months left and the dry season over.

Infrastructure spending stood at P106.2 billion, up 64.7% more than the previous year, but it should be noted that the base was low at just P64.5 billion. In 2010, infrastructure spending for the same seven-month period was P156 billion.

The government must now spend close to 65% of its infrastructure budget from August to December to meet its yearend goal of P297.98 billion.

Maintenance and other operating expenses (MOOE), meanwhile, totaled P134.6 billion as of July, up 37.2% from the P98.1 billion the year before and comprising 52.93% of the P254.3-billion full-year target.

Personal services, lastly, accounted for bulk of public spending at P298.3 billion. It increased by 9% from the P273.6 billion a year ago but was just 50.94% of the yearend goal of P585.55 billion.

Budget Secretary Florencio B. Abad, in a statement, highlighted the annual gains.

“We’ve already implemented some landmark reforms to speed up disbursements… as well as cleared up bottlenecks that only result in costly delays in project execution,” he said.

“We’re pleased to note that these measures have already produced results,” he added.

Mr. Abad claimed that road construction and preventive maintenance projects of the Public Works department, along with the Agriculture department’s creation of irrigation facilities and farm-to-market roads, had helped buoy infrastructure spending.

Releases from the Social Welfare department’s conditional cash transfer program also supported MOOE, while across-the-board salary increases for government workers boosted personal services, he explained.

Public spending reached P957.961 billion as of July, 15.1% more than the P832.316 billion posted in the same period in 2011. The government must now spend some P881.739 billion from August to December, given its full-year target of P1.84 trillion.

The Budget chief has admitted that fund absorption and project execution remained the biggest challenges.

“But, perhaps, we must acknowledge certain contexts: that we came from a regime of ‘overspending,’ of wastefulness and massive corruption in the use of public funds,” he said in a dialogue last week.

“With this, we come to realize that the alleged ‘underspending’ may just have been the effect of our reforms to take out the fat and plug the leakages in public spending,” Mr. Abad claimed. –DIANE CLAIRE J. JIAO, Senior Reporter, Businessworld