National government agencies in the first semester of the year recorded a total obligation rate of 57.8 percent, according to data provided by the Department of Budget and Management (DBM) yesterday.
The obligation rate as of June 30 improved from the 56.4 percent in the same period a year ago and the 30.5 percent in the first quarter of 2023 alone.
Computed as the percentage of obligations over allotments, the obligation rate is among the metrics used by the DBM in determining the absorptive capacity of government agencies.
At the continuation of the Development Budget Coordination Committee briefing in the Senate on the proposed 2024 national budget yesterday, DBM Secretary Amenah Pangandaman identified the agencies with the lowest obligation rates in January to June 2023.
Leading the list is the Department of Information and Communications Technology (DICT) with an obligation rate of 9.2 percent in the first semester. In the same period last year, the obligation rate of DICT was 19.4 percent.
The rest of the agencies identified by the budget chief include the Department of Migrant Workers with an obligation rate of 14.3 percent; other executive offices, 18.4 percent; Commission on Elections, 26.1 percent; Department of Agrarian Reform, 28.9 percent; Department of Energy, 34 percent; Office of the Press Secretary, 34 percent; Department of Social Welfare and Development, 34.2 percent; and the Department of Tourism, 35 percent.
All agencies have been instructed to come up with spending catch-up plans for the remaining months of the year after expenditures fell below program in the first half of 2023 by P170.5 billion or 6.6 percent. The agencies’ underspending also contributed to the weaker growth rate recorded in the second quarter of 4.3 percent.
“(We have a deadline) for agencies to submit their catch-up plans before September 15,” Pangandaman said.
Previously, she said the low disbursement against the program was primarily attributed to the substantial outstanding checks recorded as of end-June 2023; lower-than-programmed interest payments in view of the settlement of premia from the re-issuances of bonds; ongoing implementation of social protection programs, particularly the registration and validation of beneficiaries; procurement-related difficulties; ongoing right-of-way acquisition; and billing concerns from suppliers/creditors, such as late submissions of billing statements and compliance with documentary requirements.
In response to these issues, Pangandaman cited measures to improve agency budget utilization. These include the early release of allotments; conduct of early procurement activities; simplified Implementing Rules and Regulations for the Government Procurement Reform Law; launch of the Government Purchase Card; digitalization of government disbursements and collection; adoption of the Integrated Financial Management Information System across agencies; and the issuance of DBM circular letter on agency catch-up plans.
She also underscored the need for legislation to enhance public procurement.
