Government spending down 8.7% to P402.8B in 5 months

MANILA, Philippines - State spending by all departments and agencies amounted to P402.8 billion as of end-May, the Department of Budget and Management (DBM) reported yesterday.

The amount is equivalent to 32.6 percent of the P1.237-trillion disbursement program for 2011 via the department’s notices of cash allocation (NCAs).

Budget and Management Secretary Florencio Abad said this amount is only 8.7 percent less than the P441.3-billion negotiated checks during the same period last year, which was the height of election spending in the run up to the May 10 election.

“The departments and agencies are now catching up with their spending. With their catch-up plans in place, we are expecting further improvements in the next months ahead,” Abad told reporters.

Abad said agencies’ disbursement capacity also slightly improved as the amount of checks negotiated during the period amounted to 92 percent of the total P437.9-billion NCAs issued.

On the other hand, the NCA’s utilization rate as of April 2011 was only 90 percent.

 Among the key releases during the last five months of the year is the P7 billion Department of Education school building project, P5 billion for health insurance program of the Department of Health, the P3.430 billion for Department of Agriculture’s National Rice Program, and the P1 billion fund release for the potable water supply.

Of the total P1.711-trillion disbursement program for 2011, P1.237 trillion represents NCA disbursements while P474 billion are non-NCA disbursements.

According to the DBM, negotiated checks are checks issued by agencies under the modified disbursement system (MDS) that have been encashed by payees through government servicing banks (GSBs). NCAs are disbursement authorities issued by the DBM to central, regional and provincial offices and operating offices, through GSBs, to cover the cash requirements of departments and agencies.