DBM releases P2.322 T to government agencies in 8 months

MANILA, Philippines - Allotment releases for the first eight months of the year were slightly lower than last year as a proportion of the total budget, but the Department of Budget and Management (DBM) maintains the spending acceleration remains on track.

According to a statement released over the weekend, a total of P2.322 trillion is already deemed released to state departments and agencies as of August, representing 89.1 percent of the P2.606-trillion budget for 2015.

The proportion of the budget released were slightly down from 89.3 percent posted in the same period last year. The DBM attributed this to the increase in the General Appropriations Act from P2.264 trillion in 2014.

“While releases made by August 2014 represented a slightly higher percentage…, the significant increase in this year’s national budget means that P300.6 billion more in allotment releases have been made in the last eight months, compared to the same period in 2014,” the agency said.

The Aquino administration has come under fire for its persistent underspending that helped curb the budget deficit – the difference between expenditures and revenues – to P18.5 billion as of July.

Budget Secretary Florencio Abad, however, said growth in spending – which hit a 13-month high of 25 percent in July – is proof the government is on track to faster pace of disbursements in the coming months.

“We now look to our agencies to sustain the improvements they’ve so far made, and to continue optimizing their budgets to help support the country’s growth,” Abad was quoted as saying in the statement.

“This gives us a good measure of confidence in our spending performance for the rest of the year,” he added.

An allotment is an authorization from the DBM for agencies to spend for their projects. Disbursements - one which is recorded in the government’s fiscal performance – however, only happens when actual withdrawal of cash is made.

The withdrawal pertains to the issuance of a check by the Bureau of the Treasury to state agencies, one which would still require a disbursement authority from the DBM.

As of August, a total of P1.274 trillion have already been released to state departments, representing 95.5 percent of their total P1.740-trillion aggregate budget for the year. The proportion is higher than 93.4 percent in the same period a year ago.

Meanwhile, P821.79 billion in automatic appropriations have also been authorized by DBM. This represented 94.9 percent of the total P866.23-billion in automatic outlays, or those which are annually included in the budget without the need for Congress approval.

Automatic appropriations include items such as retirement and insurance premiums for state employees, net lending to government corporations as well as foreign and local debt servicing.

The remaining balance of P225.85 billion were in the form of special purpose funds, which includes contingency funds for natural disasters and calamities. Total releases so far accounted for only 55.6 percent of its P405.92-billion budget.

“These funds, such as the National Disaster Risk Reduction and Management Fund, are not released until contingencies arise and the appropriate release requirements are met,” Abad pointed out.