Infrastructure spending down

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    Lower outlay. Infrastructure and capital outlays were lower by 13.2 percent or by P9 billion in August. (Reuters photo)
    Lower outlay. Infrastructure and capital outlays were lower by 13.2 percent or by P9 billion in August. (Reuters photo)

    While the government’s total expenditures in August increased from a year ago, data from the Department of Budget and Management (DBM) showed that infrastructure spending posted a year-on-year decline, still due to the delayed passage of the budget and the election ban.

    The latest assessment of the national government’s disbursements performance posted in the DBM website yesterday showed infrastructure and capital outlays were lower by 13.2 percent or by P9 billion in August, amounting to P59.3 billion versus the P68.4 billion recorded in the same month a year ago.

    For the first eight months of the year, infrastructure spending amounted to P446 billion, 11.8 percent down from the P505.6 billion posted in the same period in 2018.

    The Bureau of the Treasury earlier reported national government spending in August stood at P282.2 billion, surpassing the P259.5 billion outturn for the same month last year by 8.8 percent.

    The DBM said the expansion was driven by higher disbursements for subsidies, personnel services, maintenance expenditures, total transfers to local government units, and tax expenditures.

    The total disbursements as of end-August 2019 grew 0.9 percent year-on-year
    to P2.21 trillion.

    “For September 2019, higher disbursements are expected as agencies utilize their remaining NCAs (notice of cash allocations) before they lapse at the end of the quarter, and as they try to catch up with their respective spending plans,” the DBM said.

    “Initial data from Modified Disbursement System – Government Servicing Banks indicate that disbursements grew by about 40 percent year-on-year. This hopefully signals a faster rate of spending for the remaining months to keep up with the P3.77 trillion target for the year,” the DBM said.

    For the last four months of 2019, the DBM said only P316.2 billion or 8.6 percent of the P3.66 trillion obligation program for the year is yet to be released.

    This is composed largely of some P178.5 billion agency specific budget and some P171.6 billion Special Purpose Funds. The release of the balance is subject to submission of special budget request and pertinent supporting documents.

    The DBM said based on the preliminary report of allotment releases, some P145.1 billion worth of allotments have been
    issued in September.

    “Some of the big-ticket releases, which could drive the growth of disbursements, include the P29.8 billion for the requirements of health insurance premiums of senior
    citizens enrolled in the National Health Insurance Program of the Philippine Health Insurance Corp.; P18 billion for the Unconditional Cash Transfer Program through the Land Bank of the Philippines as conduit; and P13.3 billion for the payment of right-of-way requirements of the Department of Transportation,” the DBM said.

    In a statement, the DBM also reported that the national government’s NCA utilization rate was at 97 percent from January to September.

    The DBM said this corresponds to P2.202 trillion out of P2.261 trillion in NCAs released for the period.

    “While the year-to-date NCA utilization rate as of end-September this year is similar to last year’s rate of 97 percent, both total NCAs utilized by the government and total NCAs released by the DBM were higher this year than last year by P119.313 billion and P112.190 billion, respectively,” the DBM said.

    From January to September 2018, P2.083 trillion out of P2.149 trillion in NCAs was utilized by national government agencies.

    NCA refers to the disbursement authority issued by the DBM to cover the cash requirements of the operations, programs, and projects of government agencies.

    A higher NCA utilization rate demonstrates the capacity of line agencies to timely disburse their allocated funds and implement their programs and projects.

    Line departments utilized P1.587 trillion of the P1.646 trillion in NCAs released to them from January to September this year, equivalent to a 96 percent year-to-date NCA utilization rate.