Spending binge likely to keep growth target on track – DBM

MANILA, Philippines - The rise in state spending was not a “one-off” effect and likely continued in August and in the months to come, fueling optimism the government will hit its growth target this year, according to the Department of Budget and Management.

 “We are optimistic that as far as the disbursements are kicking in now that we can hit the low-end of the growth target toward the end of the year,” Budget director Rolando Toledo told reporters yesterday.

Asked later on if he thinks the spending acceleration in July, which was the fastest in 13 months, would continue, Toledo said in a briefing: “It’s not just a one-off. We are already seeing an increase in that.”

The Aquino administration has been criticized for its persistent underspending, which together with an increase in revenues, has capped the budget deficit at P18.5 billion for the first seven months.

The year-to-date budget gap-the difference between expenditures and revenues-only accounts for about 0.06 percent of this year’s ceiling of P284 billion. Underspending contributed to 5.3-percent growth in the first half, below the official target of seven- to eight-percent.

According to Bureau of Treasury data, state spending accelerated 25 percent in July alone-the fastest in 13 months-swinging the budget gap-the difference between expenditures and revenues-to P32.2 billion that month.

The spending increase, however, came on the back of a more than 40-percent decline in expenditures in the same period last year when the controversial Disbursement Acceleration Program (DAP) was declared unconstitutional.

 “We already made some adjustments, particularly in the special purpose funds, where we tried to lower the lump sum funds in recognition of the Supreme Court ruling,” Budget Undersecretary Janet Abuel said in the same briefing.

 “We have also crafted action plans in the process to ensure that agencies are able to catch up on their spending (plans),” she added.

The high court declared the P72-billion DAP in 2011 as unconstitutional, saying it circumvented legislative powers to appropriate funds. DAP re-channeled unused funds from agencies to other projects to help accelerate spending.

Toledo, meanwhile, also cited Administrative Order 46 issued by President Aquino early this year which mandated state agencies to establish key permanent units that would monitor spending developments.

 “Full-time delivery units” and bids and awards committees were put in place, he said, in an effort to fast-track procurement processes in agencies.

“We’ve already done a lot of policy issuances to fast track the implementation of the projects,” Toledo pointed out.