State agencies slow down on spending in 5 months

MANILA, Philippines — The government ramped up its releases of cash allocations but state agencies continued to post lower spending rates as of May.

Data from Department of Budget and Management (DBM) showed that notices of cash allocation (NCAs) inched up by four percent to P1.71 trillion as of end-May from P1.64 trillion in the same period last year.

Despite the increase, government agencies recorded a slightly lower utilization rate of 91 percent from 93 percent in the five-month period in 2022.

This means that of the total releases, some P146.18 billion was unused as of end-May.

NCAs are disbursement orders by the DBM to government banks servicing the release of funds to agencies. State agencies are expected to use the NCAs to pay for the cash requirements of their programs and projects.

A higher utilization ratio indicates greater capacity of agencies to implement their programs and projects.

During the weekly Kapihan sa Manila Bay forum, Budget Secretary Amenah Pangandaman said the current utilization rate of agencies will be taken into consideration in the 2024 budget.

Pangandaman warned that departments and agencies with low spending rate would see a reduction in their funding allocation for next year.

“We want that they could spend it in one year but usually it is extended, especially last year given that the administration is new. It takes time for them to implement their projects,” Pangandaman said.

“It’s already June and if by now, you still have a huge amount to be spent and then you get another big budget for next year, you might choke and have more difficulty implementing,” she said.

The budget chief maintained that a higher budget should instead be given to those who can really use the funds and implement their projects.

For the remainder of the year, however, Pangandaman expects state agencies to pick up on their utilization.

Meanwhile, a little over 70 percent of NCA releases were secured by line departments at P1.24 trillion. The remaining P469.48 billion was directed to other agencies, especially state-run firms and local governments.

By sector, other agencies managed to use up the entire allocation for them to cover the internal revenue allotment, special shares and other transfers for LGUs.

Line departments, on the other hand, registered a lower utilization rate of 88 percent or P1.1 trillion for the NCAs they received as of end-May. Same period last year, the spending rate was 91 percent.

By departments, the Department of Public Works and Highways (DPWH) and the Department of Education (DepEd) still obtained the highest NCAs worth P300.11 billion and P261.29 billion, respectively, in the five-month period.

Data showed that DPWH’s utilization rate remained at 94 percent while DepEd also retained its spending rate at 96 percent.

As of end-May, only the Commission on Elections recorded a 100 percent utilization rate.

Other agencies that recorded above 90 percent utilization rate as of May include the DBM, and the Departments of Energy, Finance, Health, Interior and Local Government, Justice, National Defense, Trade and Industry, and the National Economic and Development Authority.

Also included are the Office of the Press Secretary, Commission on Audit, as well as state universities and colleges.

On the other hand, the Department of Migrant Workers still registered the worst utilization rate as of May at only 42 percent of its NCAs totaling P2.47 billion out of the P5.95 billion allocation.

The Department of Agriculture came in second with a utilization rate of 48 percent at P15.6 billion out of P32.57 billion, while the Department of Social Welfare and Development came in third with a spending rate of 54 percent.

Last year, the DBM released a record P4.42 trillion worth of NCAs as the government expedited programs and projects that could help the country recover from the pandemic.