Gov’t agencies spend budget better in H1

State agencies improved their capacity to spend their budget in the first half, giving the Duterte administration a boost on its effort to increase disbursements and widen the budget deficit.

A total of P850.78 billion in allotments were obligated as of end-June, data from the Department of Budget and Management (DBM) showed.

The figure accounted for 44.85 percent of P1.9 trillion in allotments released to agencies during the period, up from 43.19 percent in the previous year and 43.63 percent in June 2014.

“The disbursement data show this trend of better spending rates,” Budget Undersecretary Laura Pascua said.

Obligations mean the amount had already been secured for specific contracts and are just awaiting the issuance of checks from the Bureau of the Treasury. Allotments indicate agencies can enter into contracts.

During the Aquino administration, DBM said underspending was the main reason why government agencies failed to better “absorb” the budget, meaning, to obligate them for public services.

Underspending has been tagged as one of the reasons for a slowdown in economic growth in 2011 and 2013.

According to latest DBM data, only five agencies were able to obligate more than half of their allotments during the first semester.

They were led by the Department of National Defense, which had an obligation rate of 57.61 percent. It was followed by the Autonomous Region in Muslim Mindanao with 55.14 percent.

The Department of Environment and Natural Resources was next with 53.63 percent, while the primary infrastructure agency, Department of Public Works and Highways (DPWH), recorded 53.01 percent.

The Department of Interior and Local Government had 52.31 percent obligation rate. Meanwhile, the Department of Energy recorded the lowest rate of 11.65 percent.

Sought for comment, Emilio Neri Jr., lead economist at Bank of the Philippine Islands, said he “expected” to see some acceleration on DPWH spending considering the transition in government.

“They would have wanted to finish as much projects as possible so that’s expected,” Neri said in a phone interview yesterday.

Going forward though, he said it should not be surprising to see some slowdown for the rest of the year despite a higher deficit ceiling of P388.68 billion, equivalent to 2.7 percent of economic output.