Government agencies used up their budget allocations faster in January this year than in the same month in 2024, sending the utilization rate up to 78 percent, the Department of Budget and Management (DBM) said yesterday.
The January 2025 utilization rate at 78 percent compares with 70 percent in January last year, data from the status of notices of the government’s cash allocation released via the DBM website showed on Thursday.
The NCA utilization rate in January this year corresponded to P233.8 billion, out of the P300.67 billion in NCAs released for the period. The unutilized NCAs in January amounted to P66.87 billion.
NCA refers to the disbursement authority issued by the Budget department to cover the cash requirements for the operations, programs and projects of government agencies.
A high NCA utilization rate demonstrates the capacity of line agencies to quickly disburse their allocated funds and implement their programs and projects.
In the same period in 2024, the NCAs utilized amounted to P205.02 billion.
Line departments used up P143.1 billion of the P202.99 billion in NCAs released to them as of January 2025, equivalent to a 70 percent utilization rate.
On the NCAs released for budgetary support to government-owned and -controlled corporations, 100 percent was utilized equivalent to P4.39 billion.
At least 93 percent of the NCA released as allocation for local government units was also utilized in January, amounting to P86.32 billion.
Michael Ricafort, Rizal Commercial Banking Corp. chief economist, said via Viber that the higher cash utilization rate would lead to faster government spending growth that, in turn, would result in faster overall economic growth.
“The faster cash utilization rate may have to do with preparation for the midterm elections, in terms of the need to complete more infrastructure projects and other government projects before the election ban. This would highlight achievements, serving as the basis for choosing candidates by the voters/electorate,” Ricafort said.
John Paolo Rivera, a Philippine Institute for Development Studies senior research fellow, said also through Viber that a higher NCA utilization rate suggests improved government spending efficiency, but warned against the adverse effects like inflation.
“While increased government spending supports economic activity, it could also contribute to inflationary pressures, especially if spending is concentrated in sectors with supply constraints. It also supports the administration’s push for timely budget execution, particularly IFPs (infrastructure flagship projects), agricultural programs and human capital development,” Rivera said.
“If the trend continues, it signals a more proactive government stance in executing priority programs, but monitoring is crucial to ensure that funds are spent efficiently rather than rushed to meet disbursement targets,” he added.
