The national government is doing its best to improve spending in the remaining quarters of 2015 to make up for the slack in disbursements that dragged growth in the first three months below forecasts, the Department of Budget and Management (DBM) said on Wednesday.
Budget Secretary Florencio Abad told the Economic Journalists Association of the Philippines (EJAP) in a forum jointly hosted by ING Bank the economy could have grown above 7 percent in the first quarter if all government agencies faithfully implemented their respective cash programs.
“What we’re trying to do is get them churning faster than how they did in the first quarter. I don’t think the institutional weakness should be an excuse to slow the economy down. I think the name of the game for us is to really catch up much faster than what we have been doing in the first quarter,” he said.
Spending to rebound in last 3 quarters
Balisacan stressed that government spending may rebound in the last three quarters of the year given a big chunk of the budget left ready to be spent.
Apart from the P2.6 trillion national budget for 2015, there is about P468 billion carried over from 2013 and 2014 that can be spent on Yolanda rehabilitation, public-private partnership (PPP) projects and other priority projects of the government, he said.
To address the bottlenecks, a new initiative by the government that will be co-chaired by the DBM and the National Economic and Development Authority (NEDA) signed on Tuesday will make sure that agencies will use up their allocations under the cash programs, Abad said.
“Yesterday, I signed a Department Order directing the establishment of a permanent delivery unit system that will allow us to keep better track of expenditures under each agency,” he said.
The Budget chief explained that under the new system, every department of the government will have to establish a full-time delivery unit to make sure that disbursements are accelerated.
“We will provide them with permanent staffing so that they can rely on full-time people to monitor the disbursements of every agency and look into bottlenecks and deal with those bottlenecks, and then report to the DBM as well as to the NEDA,” he said.
Aquino to get monthly updates
The DBM and NEDA will update President Benigno Aquino 3rd every seventh day of the month on the disbursement status of government agencies.
“The new system will start with the Yolanda relief and rehabilitation program, but I am certain, [that will also include]the key priorities of government like social services, infrastructure, agriculture. Hopefully, with this in place, we can see improvements in disbursements,” he said.
Abad added that such measures, alongside the existing budget reforms, “will allow the government to strike at the heart of our spending shortfalls.”
“We are doing all this because we believe that economic growth must not take a backseat to good governance, in much the same way that our country’s progress must not be made at the expense of national integrity. Instead, transparent, accountable, and open leadership must necessarily drive and complement economic growth,” he said.
“If you look at the government spending figures, there’s actually an improvement and I think those will be felt in the latter part of the second quarter and certainly in the next semester,” he said.
“Hopefully with the institutional interventions that were making, we will be able to achieve that,” he concluded.