The Market Monitor Minding the Nation's Business
National government disbursements registered a remarkable 13 percent growth in 2015, the fastest year-on-year growth since 2012.
Full-year spending also exceeded the growth posted at 5.4 percent in 2014 and 5.8 percent in 2013, closing the year strong with a double-digit growth after two consecutive years.
Actual disbursements in 2015 reached P2,230.6 billion—higher by P249.0 billion in 2014—buoyed by the significant improvement in spending in the second half of 2015, which grew by as much as 17 percent.
The robust full-year performance is largely contributed by higher disbursements in maintenance and operating expenditures growing by 30.7 percent, and capital outlays increasing by 25.1 percent.
“The 2015 spending figures show that the government has been able to reshape budget priorities toward allocating more resources to social and economic services. Higher disbursement in maintenance, as well as capital outlays, funded the expansion of programs in social services, defense, and road and transport infrastructure in 2015,” Budget Secretary Florencio B. Abad said.
He said the reforms the budget department has implemented are making headway. These include the comprehensive release of the budget and the measures to accelerate procurement, including the creation of full-time BAC personnel. All these allowed line agencies to obligate more starting in the second quarter.
As a result, agency utilization of cash allocations accelerated, starting in the second quarter, to 89 percent from about 82 percent in the first quarter, before jumping to 96 percent and 97 percent in the third and fourth quarters, respectively. This improvement translated to an increasing trajectory of government disbursements, from only 4.5-percent annual growth in the first quarter to 12.4 percent in the second, ramping up to 19.3 percent high in the third, and ending at 14.2 percent in the fourth.
Abad noted that his department found it crucial to fix spending bottlenecks through the creation of Full-time Delivery Units (FDUs), which track the progress of project implementation and troubleshoot implementation issues. As a result, agencies were able to utilize their budgets better, attaining a 97-percent cash utilization rate in the last quarter of the year.
He said the strong spending performance is a good indicator that priority programs supported in the national budget are being implemented nationwide and that public resources are being spent more efficiently.
Based on recent figures from the Philippine Statistics Authority, Abad also noted that the government’s huge investments in public infrastructure, mainly for road and transport development, boosted public construction to 20.6 percent growth in 2015, compared with only 5.4 percent in the private sector. As a result, the construction industry still grew by 8.9 percent in 2015, despite the slowdown in private construction.
“One of the drivers in the country’s economic growth is government spending, achieving a 5.8-percent growth in 2015. Knowing that critical role, we will work toward sustaining the growth momentum this year as we fast-track key projects to ensure that this will benefit the Filipino people,” the budget chief said.
Based on the fiscal report by the Bureau of the Treasury, spending also picked up in December, with actual disbursements reaching P238.7 billion, surpassing the target by 15.6 billion. As a result, the national government posted a P75.1-billion deficit for December, 62 percent or P28.8 billion higher than the deficit recorded in the same month last year.