Budget usage improves to 91% in 8 months to August

CASH UTILIZATION by government agencies improved year on year in the eight months to August, the Department of Budget and Management (DBM) reported, with spending likely facilitated by easier quarantine conditions this year.

Utilization, as measured by a budget document known as the Notice of Cash Allocation (NCA), came in at 91% of the P2.676 trillion in NCAs issued in the eight months, leaving P229 billion unused.

The year-earlier usage rate was 83%, while utilization in the seven months to July 2021 was 89%.

The NCA is the disbursement authority from the DBM issued to agencies authorizing them to withdraw funds from the Treasury to cover their spending needs.

“The utilization rate improved compared to last year, when mobility curbs may have hampered overall operations. With lockdown measures eased somewhat with a particular focus on infrastructure spending, disbursement and allocation have improved,” ING Bank Senior Economist Nicholas Antonio T. Mapa said in an e-mail Thursday.

He said spending on both public construction projects as well as non infrastructure programs have been picking up at a “modest pace.”

“The high utilization rate is a welcome development. We hope that the high utilization translates to actual spending with funds hopefully finding their way to the real economy,” he added.

Budget allocations have also risen with the government spending more in response to the pandemic and economic downturn, Asian Institute of Management Economist John Paolo R. Rivera said in an e-mail.

The government continues to enforce varying levels of lockdowns to curb the spread of coronavirus disease 2019 (COVID-19), after daily case counts hit record highs recently on the back of the highly infectious Delta variant of the coronavirus.

According to the DBM, line departments used 89% or P1.65 trillion of their NCAs in the eight months, leaving P207 billion unused.

The Commission on Human Rights and the Civil Service Commission recorded the highest budget usage rates at 99%, while the Department of Information and Communication Technology posted the lowest rate of 60%.

Budgetary support to governmentowned companies as well as allotments to local government units were 97% utilized in the eight months, out of P818.88 billion NCAs issued.

Mr. Rivera said government spending is crucial for stimulating economic growth during the rebound from the pandemic.

“However, what is interesting to note is where did the expenses go? Were they spent on salaries, pandemic response, assistance? We cannot harness the accelerator effect of these spending if they are not spent/allocated to things that truly matter,” he added.

The DBM had released 92% of this year’s P4.5-trillion spending plan as of August, leaving P358 billion for the remainder of the year. —