Spending still lagging

INFRASTRUCTURE spending remained well below the full-year program as of September, Budget department data showed, as disbursements to some agencies were underutilized and funds remained unreleased.

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The nine-month tally of P136.5 billion, while a significant improvement from the P86.1 billion recorded in the comparable 2011 period, was just 45.8% of the full-year goal of P297.98 billion.

“This is predominantly due to the underutilization of NCAs (notices of cash allocation) by the DPWH (Department of Public Works and Highways), as well as the low obligation rate for farm-to-market road projects and large unreleased balances for public-private partnership strategic support funds,” Budget Secretary Florencio B. Abad yesterday said.

He claimed, however, that departments and agencies had improved their absorptive capacities in the third quarter, with the DPWH in particular having obligated 72% of its allotments for the period.

The broader category of capital outlays — comprised of expenditures for infrastructure, equity and capital transfers — stood at P190.1 billion as of last month. While 37.5% more than the P138.3 billion spent in the same period last year, it was still only 50.77% of the full-year goal of P374.4 billion.

The Budget department, Mr. Abad claimed, is continuing to work on catching up with spending goals.

“We’re assigning account management teams to agencies to make sure that, first, we identify where the clogging is, identify the bottlenecks, and then address that,” he said.

He also weighed in on Monday’s credit rating upgrade from Moody’s Investors Service, saying in a statement that this could help accelerate spending reforms, among others.

The rating was raised to Ba1 from Ba2 with a stable outlook, with Moody’s citing improvements in the economy and the country’s medium- and long-term growth prospects.

At one notch below investment grade, the Moody’s rating is now aligned with the BB+ both held by Fitch Ratings and Standard & Poor’s.

“Of course, this upgrade means that there are greater expectations from the international community on our fiscal performance,” Mr. Abad said. –BETTINA FAYE V. ROC, Reporter, Businessworld