Gov't spending peaks by 34% to P328.1 billion in July 2018

'We maintain our projection that underspending will be eliminated under our watch,' says Budget Secretary Benjamin Diokno

Aika Rey

7:23:49am September 5, 2018

8:34:9am September 5, 2018

HIGHER SPENDING. DBM Secretary Benjamin Diokno says government spending peaked in July 2018. Photo by Aika Rey/Rappler

HIGHER SPENDING. DBM Secretary Benjamin Diokno says government spending peaked in July 2018. Photo by Aika Rey/Rappler

MANILA, Philippines – The Philippine government has reached its peak on spending, with disbursements amounting to P328.1 billion in July or a 34% increase from the same period in 2017.

Budget Secretary Benjamin Diokno on Wednesday, September 5, said that higher spending affirms the "government's commitment to reduce underspending and instill public financial reforms."

"We are doing our best to fast-track the release and disbursement of funds for public programs and projects. We maintain our projection that underspending will be eliminated under our watch," Diokno said in his weekly media briefing.

Bulk of July's spending went to infrastructure amounting to P84.5 billion – 75% higher or P36.1 billion more than July 2017 spending at P48.4 billion. (READ: Gov't fiscal deficit narrows to P193 billion mid-2018)

The Department of Budget and Management (DBM) attributed this to public works projects, as well as equipment acquisition through the Armed Forces of the Philippines modernization program.

Procurement of machinery and aircraft equipment by the Department of Transportation also contributed to higher capital spending.

SPENDING. Government spending is up by 34% for the month of July, compared to the same month in 2017. DBM Photo

SPENDING. Government spending is up by 34% for the month of July, compared to the same month in 2017. DBM Photo

The budget department also cited higher subsidies to government corporations at P32.5 billion, or 93% higher than July 2017 figures.

Disbursements of around P27.7 billion went to health insurance premiums for indigents enrolled under the National Health Insurance Program of the Philippine Health Insurance Corporation. 

The National Irrigation Administration received P2 billion for irrigation projects. The Land Bank of the Philippines got P2 billion as well, for cash downloads as social mitigating measure for the tax reform law.

Faster allotment releases

Diokno also reported a faster release of allotments in July, amounting to P3.447 trillion or 92% of the P3.767 trillion national budget for 2018.

Only 87% of the national budget was released in the same period in 2017.

The budget chief saw this improvement as "crucial" in ensuring that obligations are met by yearend, with the transition to a cash-based budgeting system in mind. (READ: What is cash-based budgeting?)

"Looking ahead, the shift to an annual cash-based system will further enhance spending efficiency as performance will be measured on concrete outputs and not just on contracts awarded," Diokno said.

Of the total budget for 2018, around P319.8 billion remains unreleased, which is largely part of the special purpose funds at P153.4 billion and some P137.5 billion from department agencies.

The DBM expects these allotments to be released in the coming months, as appropriations for 2018 is valid only for one year.

Next year, the proposed cash-based budget amounts to P3.757 trillion, representing 19.3% of the projected gross domestic product (GDP) for 2019. – Rappler.com