DBM eyes review of budget utilization metrics

MANILA, Philippines — The Department of Budget and Management (DBM) may revisit how it measures the budget utilization of government agencies, as high spending rates do not necessarily mean that public programs and projects are being delivered as intended.

Speaking at the launch of a procurement reform project funded by the European Union (EU), Budget Secretary Kim Robert de Leon said the government should look beyond traditional spending indicators and focus more on whether agencies are able to produce the expected outputs and outcomes using public funds.

“We should really try to revisit the concept of the budget utilization rate, because a higher utilization rate does not necessarily mean that an agency delivered everything expected of it,” he said.

“Efficiency means producing the expected output with much lower input. So why force a high budget utilization rate when an agency does not need to use its entire budget?” he said.

De Leon added that agencies should not be penalized for using fewer funds if they are still able to deliver the expected results.

Latest DBM data showed that notices of cash allocation (NCAs) issued to national government agencies, government-owned and controlled corporations and local government units reached P1.78 trillion from January to April, up by 9.5 percent from P1.63 trillion in the same period last year.

Of the total NCAs released, P1.63 trillion was utilized as of end-April, an 8.8-percent increase from P1.49 trillion a year ago. However, the utilization rate eased to 91.3 percent from 91.9 percent.

NCAs refer to the cash authority issued by the DBM to cover the requirements of government agencies, including their operations, programs and projects.

The DBM chief tied the possible review of utilization metrics to the government’s broader procurement reform agenda under Republic Act 12009 or the New Government Procurement Act.

He said procurement should not be viewed as a mere administrative process, as it determines whether budget allocations are translated into actual projects and services.

“Procurement is where government promises become reality,” he said. “A school, for instance, is not built by a budget allocation alone. A hospital does not become operational through appropriations alone.”

“Simply put, procurement is where public service becomes tangible. That is why procurement reform is also governance reform,” he said.

De Leon said delays in procurement ultimately lead to delays in public service, including classrooms for students, medicines for patients, infrastructure for communities and social services for families.

To address bottlenecks, De Leon said agencies should improve procurement planning even before the General Appropriations Act (GAA) is enacted.

“If you will be waiting for the GAA to be enacted before you conduct your market scoping, your market study and definition of what the term of reference should be, then we’re already looking at delays even at the start of the planning process,” he said.

“So if we plan our projects well, then we can do early procurement and roll out everything even at the beginning of the year,” he said.

The DBM, EU and United Nations Development Program Philippines launched the Partnership in Reinforcing Capacity, Transparency and Efficiency in Public Procurement, a 3.6-million euro project funded by the EU and implemented by UNDP.

The project, which will run from October 2025 to April 2028, will support the implementation of the New Government Procurement Act through data analytics, open contracting standards, citizen participatory audits, procurement training, gender-responsive policies and stronger cybersecurity protocols.

De Leon said the partnership would help modernize procurement systems, improve transparency and empower procurement professionals as the government seeks to move faster without compromising integrity.