Spending grew 20% in Q1

Government spending in the first quarter of the year grew about 20 percent on the back of faster project implementation and the increase in the salaries of government personnel, the Department of Budget and Management (DBM) said.

Budget Secretary Benjamin Diokno said government expenditures may have expanded at a double-digit rate as compared to last year’s level.

“Maybe about less than 20 (percent),” Diokno told reporters.

According to DBM data, government spending in the first quarter of last year amounted to P615.4 billion, four percent higher than the end-March 2016 level.

Latest data showed disbursements in January 2018 rose 15 percent to P228.7 billion from the P198.1 billion recorded the same month in 2017.

Despite the double-digit increase in the first month of the year, Diokno said spending growth during the period was still slow.

“I still think that’s slow. Because our budget right now compared to 10 years ago has quadruped, the budget is big. We are making up for past neglect. Historically, infrastructure-to-GDP is about 2.6 percent, now it’s already at 6.1 percent,” he said.

Diokno said expenditures is expected to grow faster in the months following January as government agencies pick up the pace of project implementation.

The increase in government salaries, as brought about by the third tranche of Salary Standardization Law in January, will also drive the increase, Diokno said. “It will still get higher. Spending is like an S-curve. At the onset of the fiscal year, it’s slow and then it will accelerate,” he said.

The secretary also expressed confidence the government would be able to sustain the pace in its spending to achieve its full year spending target.

Diokno is also optimistic the country’s economy would grow within the seven to eight percent target set by economic managers.

For 2018, the national government is targeting to spend P3.31 trillion, about 17.4 percent higher than the 2017 actual spending of P2.82 trillion.

To achieve this target, the DBM has initiated measures to address underspending and improve the absorption capacity of state agencies, such as the enforcing a one-year validity of appropriations instead of two years.

The DBM recently introduced reforms in budget planning and the disbursement process.

Diokno had said the DBM is institutionalizing these measures, as well as the shift from obligation-based budgeting to a cash-based one through the passage of the Budget Reform Bill.