Agencies’ budget usage rate improves to 70%

State agencies recorded a better spending rate at the start of the year as the government ramped up the release of its cash allocations to fund various projects.

Latest data from the Department of Budget and Management (DBM) showed that notices of cash allocation (NCAs) rose by three percent to P293.56 billion in January from P284.47 billion in the same month in 2023.

Likewise, utilization rate improved to 70 percent from 66 percent. A higher utilization ratio indicates greater capacity of agencies to implement their programs and projects.

Of the total releases, the DBM said P205.02 billion was utilized, while P88.54 billion was unused last month.

The DBM earlier called on state agencies to ramp up their spending as the low budget utilization tends to impact economic growth.

The DBM also released more funds at the start of the year to allow early implementation of projects.

NCAs are disbursement orders by the DBM to government banks servicing the release of funds to agencies.

State agencies are expected to use the NCAs to pay for the cash requirements of their programs and projects.

Line departments secured 73.1 percent of NCA releases at P214.7 billion, while the remaining 26.9 percent or P78.86 billion was directed to other agencies, especially state-run firms and local governments.

By sector, line departments registered a utilization rate of 59 percent or P126.35 billion for the NCAs they received in January. This is better than the 55 percent recorded in 2023.

Other agencies used up their entire allocation largely to cover the internal revenue allotment, special shares and other transfers for LGUs.

By departments, the Department of Education (DepEd) as well as the Department of Public Works and Highways (DPWH) obtained the highest NCAs worth P56.43 billion and P56.17 billion, respectively, in January.

Data showed that DepEd used 61 percent of its NCAs, but the DPWH managed to spend only about 32 percent of its allocation.

Both agencies, however, recorded lower spending rate as compared to last year.

Among the agencies, only the Commission on Human Rights recorded a 100 percent utilization rate during the month.

The agencies that posted above 90 percent utilization of their NCAs in January are the DBM, Department of Energy, Department of Science and Technology and the Commission on Audit.

Meanwhile, the Office of the Ombudsman registered the worst utilization rate in January, at only 27 percent of its NCAs totaling P108.27 million out of the P397.81 million allocation.