Gov’t agencies utilize 97% of NCAs in 2018

MANILA, Philippines — Government agencies exhibited a faster pace of disbursements in 2018 as shown by a higher utilization rate of notices of cash allocation (NCAs) due to the implementation of various reforms in the budget process, according to the Department of Budget and Management (DBM).

According to the latest report from the DBM, line agencies were able to utilize P2.894 trillion worth of NCAs for the whole of 2018, representing 97 percent of the P2.983 trillion NCAs released during the period.

Records showed that this rate of utilization is faster than the 94.6 percent registered in the previous year.

This also means there is still P89.84 billion worth of NCAs yet to be used as of end-December last year.

NCAs are required for agencies to claim their checks from the Bureau of the Treasury (BTr), which are then used to pay for projects and services.

Once utilized, funds are deemed disbursed and are recorded in the government’s balance sheet.

In a text message, Budget Secretary Benjamin Diokno said the faster pace of disbursement last year could be attributed to the reforms implemented by the DBM.

“The budget reforms we’ve introduced in 2017 has gained traction. First, with the adoption of GAARD (General Appropriations Act as release document), effectively a big chunk of the national budget – roughly 75 to 80 percent – is deemed released. The whole bureaucracy can implement its programs and projects immediately,” Diokno told The STAR.

Secondly, Diokno said agencies have also become more disciplined in preparing and using their budget, with only implementation-ready projects proposed in the national budget. 

He said the DBM also encouraged agencies to undertake early procurement, short of awarding contracts. The award will be done only upon the passage of the GAA.

“Fourth, the life of appropriations was limited to one year. As a result, there is a greater sense of urgency on the part of the bureaucracy to get things done sooner,” the budget chief said.

Budget Undersecretary Laura Pascua, for her part, also cited the faster payment process for obligations from the previous year.

“This is particularly evident in DPWH (Department of Public Works and Highways) which encouraged their contractors to wind down their unimplemented prior years’ projects,” Pascua said.

She said agencies are also encouraged to raise both their obligation and disbursement given the requirements to receive a performance bonus.

Pascua expressed confidence that the national government would be able to meet its P3.346 revised disbursement program for 2018.

“I think we will meet, if not go slightly above the disbursement target, which is okay since revenues is also meeting their targets. We should meet the three percent deficit target,” the DBM official said.

Based on DBM data, the national government’s disbursements from January to November 2018 already reached P3.095 trillion, 24 percent higher than the P2.493 trillion recorded in the same period in 2017.

This is also equivalent to 92.5 percent of the full-year spending target.

Earlier, Diokno said disbursement growth was mainly driven by infrastructure spending, which jumped almost 50 percent to reach P728.1 billion from P486.5 billion in end-November 2017.