State firms use up March budget

State agencies utilized all their existing budget allocations for the first time this year in March, underscoring both historical trends and urgency ahead of a poll ban on public spending.

A total of P200.69 billion or more than the P163.69 billion in notices of cash allocation (NCA) was utilized last month, data from the Department of Budget and Management (DBM) showed.

The 123 percent utilization rate was faster than the 88 percent and 74 percent recorded in January and February, respectively. For the first quarter, the rate was pegged at 96 percent.

Utilization of NCAs is a good gauge of actual spending numbers as agencies need to present the document to claim checks from the Bureau of the Treasury.

Funds are then used to pay for public projects and services. When the NCA utilization rate fell to 74 percent two months ago, disbursement growth slowed to a nine-month low of seven percent.

“This compensates for the shortfall in January and is very supportive of our view that the first quarter growth was supported by government spending,” said Emilio Neri Jr., lead economist at Bank of the Philippine Islands.

“It was already factored in our expectations,” he said in a phone interview yesterday.

The Aquino administration has been criticized for persistently falling below its spending targets for the past six years despite wide budget space. It has also been partly blamed for slow 5.8-percent growth last year.

Historical data showed the NCA utilization rate traditionally shoots up during March. For instance, rates were at 115 percent and 103.1 percent last year and in 2014, respectively.

Neri said faster result this year was due to hastened projects ahead of the election ban on spending on public programs that started March 25.

Under the prohibition, the government may no longer funnel funds to contracts which were not obligated.