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Government ramps up spending by 28.2% in October—DBM

By Riza Lozada

Government spending grew by a hefty 28.2 percent in October to reflect the pick up in government projects and programs.

The month of October posted the highest growth recorded so far in the year, as spending reached P226.9 billion.

This brings cumulative disbursements from January to October at P2.241 trillion, which is a 10 percent increase from a year ago.

“The significant growth in government disbursements for the month of October is encouraging news in view of our expansionary fiscal policy,” Budget Secretary Benjamin Diokno said.

“The DBM, in coordination with the implementing agencies, will continue to monitor and improve spending performance,” he added.

“We expect government disbursements to ramp up further in the last two months of the year, especially with the one-year validity of the 2017 appropriations,” he said.

“The government is committed in its full-year disbursement target of P2.909 trillion,” he added.

Current Operating Expenditures rose by 35.2 percent, reaching P164.1 billion in October which was primarily driven by the growth in Maintenance and Other Operating Expenditures (MOOE).

MOOE grew by 111 percent to P40.4 billion as a result of the release of cash assistance under the Pantawid Pamilyang Pilipino Program (4Ps), social pension and other assistance programs for the victims of natural disasters and calamities.

At the same time, expenditures in connection with the relief works and operations of the DSWD for Marawi City contributed to the spike in MOOE spending.

Personnel Services, meanwhile, amounted to P60 billion, increasing by 8.8 percent, due to the higher compensation of civilian personnel and increased allowances of military and uniformed personnel pursuant to EO 201.

On the other hand, Capital Outlays amounted to P60.6 billion in October for a 10.4 percent year-on-year increase.

Infrastructure and Other Capital Outlays comprised the bulk of capital spending reaching P51.5 billion, expanding by 17.8 percent.

The boost in infrastructure spending was primarily due to the public works projects of the DPWH such as road construction and flood control rehabilitation or improvements. The acquisition of transport and other equipment of the DILG-PNP under its Capability Enhancement Program, as well as the payment for various communication, navigational and air traffic management system projects, and civil works for Light Rail Transit (LRT) Lines 1 and 2 extension projects of the Department of Transportation (DOTr) also contributed to the higher infrastructure and other capital spending.

“Looking ahead, some P331.2 billion or 9.9 percent of the P3.35 trillion obligation program is still available for release to line agencies sourced from both the agency-specific budgets and Special Purpose Funds,” Diokno said.

Line agencies have been expediting the requests for the release of their allotments, as well as obligating these funds since the 2017 appropriations are only valid until December 31 this year.

DBM dat showed personnel services expenditures reached P60 billion, up by P4.8 billion or 8.8 percent year-on-year due to the increase in the base pay of government employees and allowances of the uniformed and military personnel.

Allotment to local government units (LGUs) also stood at P32.5 billion, P3.9 billion or 13.8 percent more than the level in the previous year on account of higher shares of LGUs from internal revenue collections.

Interest Payments for the month reached P20.4 billion, P4.4 billion or 27.3 percent higher year-on-year due to coupon payments for bonds issued this year and the payments originally scheduled in September but were taken up in October.

Net lending amounted to P2.2 billion, more than twice the level in the previous year following the national government advances to the grains agency National Food Authority (NFA) to settle its short-term loan and free up its credit line in support of its importation program.

The major sources of growth of disbursements during the first 10 months were:

Personnel Services (P619.1 billion; 12.9 percent growth year-on-year) due to the higher salaries of government employees and allowances of uniformed and military personnel, creation and filling of positions in various agencies such as the DepEd, as well the release of pension and retirement gratuity benefits specifically in the Department of National Defense (DND) and the Department of Interior and Local Government (DILG);

Infrastructure and Other Capital Expenditures (P442.7 billion; 11.8 percent growth year-on-year) largely on account of the implementation of road infrastructure program of the DPWH, modernization and capability enhancement program of the DND-Armed Forces of the Philippines (AFP) and DILG-Philippine National Police (PNP), as well as other capital outlay projects in the Department of Education (DepEd) and State Universities and Colleges (SUCs) such as repair and rehab of school facilities, and the Department of Health’s (DOH) acquisition of health facilities and medical equipment) and;

Maintenance Spending (P365.9 billion; 10.2 percent growth year-on-year) owing to the implementation of human capital development programs by the DepEd (K-12 program/school operations), cash transfer of the Department of Social Welfare and Development (DSWD), CHED (scholarship programs) and OPAPP (PAMANA programs).

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