Government spending rate improves in 7 months

MANILA, Philippines — The government ramped up the releases of cash allocations, with state agencies remaining in a higher spending mode as of end-July.

Data from Department of Budget and Management (DBM) showed that notices of cash allocation (NCAs) rose by almost 10 percent to P2.74 trillion as of end-July from P2.5 trillion in the same period last year.

Even with the increase, government agencies recorded a slightly higher utilization rate of 94 percent in the first seven months from 92 percent in the same period in 2023.

This means that of the total releases, some P154 billion was unused as of end-July.

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.

About 75 percent of NCA releases were secured by line departments at P2.06 trillion. The remaining P680.35 billion was directed to other agencies, especially state-run firms and local government units (LGUs).

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

Line departments, on the other hand, registered a better utilization rate of 93 percent or P1.91 trillion for the NCAs they received as of end-July. In the same period last year, the spending rate was only 90 percent.

The Department of Public Works and Highways (DPWH) and the Department of Education (DepEd) still obtained the highest NCAs at P570.3 billion and P369.66 billion, respectively, in the seven-month period.

Data showed that DepEd was consistent in utilizing 95 percent of its NCAs while DPWH registered a higher spending rate of 93 percent from 89 percent last year.

No department registered a 100 percent spending rate.

Other agencies that recorded above 90 percent utilization rate include the departments of Finance, Interior and Local Government, Justice, National Defense, Social Welfare and Development as well as the Commission on Audit, Office of the Ombudsman, Commission on Human Rights and state universities and colleges.

On the other hand, the Department of Migrant Workers still registered the worst utilization rate as of July at only 68 percent of its NCAs totaling P4.18 billion out of the P6.18 billion allocation.

Ironically, the DBM came in second with a utilization rate of 70 percent at P1.12 billion out of P1.6 billion, while the Office of the Vice President is in third with a spending rate of 71 percent.

Last year, the DBM released a record P4.45 trillion worth of NCAs as the government expedited programs and projects that could help the country recover from the pandemic.