Budget underspending likely fell under 1% in 2017 — DBM

THE RATE of underspending on budgeted funds likely fell to less than 1% in 2017, due to a shift to cash-based appropriations, the Department of Budget and Management (DBM) said.

“I estimate that underspending will be down to less than 1% from about 10-15% in the past,” Budget Secretary Benjamin E. Diokno said during a briefing yesterday, referring to 2017 against the preceding two years.

He said that this was due to the shift to a cash-based budget where appropriations are only valid for one year.

“It has already shown results. In fact we have actually shifted to a cash-based budget. It was effective last year,” Mr. Diokno said.

“With a validity of two years, you give them the possibility of delay. No sense of urgency,” he added.

In 2016, underspending, or the proportion of unspent funds relative to target — was 3.6%. Actual spending was P2.549 trillion overall against the downward-adjusted P2.64 trillion target.

DBM data show that underspending in 2015 was 12.8%, narrowing from 13.3% in 2014.

Finance Secretary Carlos G. Dominguez III has said that total government disbursements in 2017 may have grown 13.8%.

With overall disbursements in 2016 at P2.494 trillion, a 13.8% rise suggests spending of P2.901 trillion the following year.

Mr. Diokno said the expanded spending was due to “many more projects” being firmed up and reaching the disbursement phase in 2017.

At the end of November, government spending totaled P2.494 trillion, up 10% from a year earlier.

This is equivalent to an 85.73% spending rate on planned disbursements for the year, suggesting that to meet the target, the government had to spend P415 billion in the final month of 2017.

Mr. Diokno said the government bureaucracy has likely adapted to the new spending system.

“There has been progress. We’ve had three semesters [since the new administration took over]. Somehow the bureaucracy will learn,” said Mr. Diokno.

In 2018, the government seeks to spend some P3.313 trillion. —