P14-B infra increase, lending and subsidies improve Novemberdisbursements

Secretary Abad: Spending on right track from December to 2015

The Department of Budget and Management (DBM) reported the total National Government disbursements from January to November in 2014 rose 5.1 percent compared to the same period in 2013, from P1.677 trillion to P1.762 trillion. This performance is consistent with the improvements in disbursements seen at the end of October, with spending up by 6.4 percent compared to the same ten-month period in 2013.

Spending performance for these two months was driven largely by subsidies to Government-Owned or –Controlled Corporations (GOCCs), transfers to Local Government Units (LGUs), and increases in maintenance and capital spending compared to the previous year.

Notably, capital outlay for infrastructure saw a 6.3 percent or P14 billion improvement for the 11-month period compared to 2013 levels, from P223.3 billion in 2013 to P237.3 billion last year. This reflected the Administration’s continued commitment to building and rehabilitating roads and bridges, as well as completing other infrastructure projects.

In terms of year-on-year performance, however, disbursements during the month of November were 7.7 percent lower than those made during the same month in 2013. This drop in spending contrasts with the performance in October of 2014, when NCA utilization by agencies contributed to a 6.4 percent surge in spending compared to the same month in 2013.

Secretary of Budget Florencio “Butch” Abad said, “While the November report showed lower disbursements compared to the previous month’s performance, this can be attributed largely to better management of government’s lending, our debt, and subsidies to GOCCs. This reflects the National Government’s progress in keeping down costs that don’t involve crucial projects and programs.”

While some of the drop in performance was attributed to the slower utilization of Notices of Cash Allocation (NCAs) by agencies—driven by contractions in spending by the Department of Agriculture (DA), the Department of National Defense (DND), and the Department of Social Welfare and Development (DSWD)—a large part of this decrease was derived from spending less on non-NCA items including net lending, tax subsidies, and interest payments. Non-NCA disbursements in November of 2014 amounted to P10.3 billion, 27.5 percent lower than in the previous year.

Disbursements by Expense Class, 2013 vs. 2014in billion pesos, unless otherwise indicated
ParticularsAs of NovemberIncrease/Decrease
Current Oper. Exp.1,371.41,442.571.15.2
  PS    538.0     541.53 .5     0.7
  MOOE    254.2     274.4        20.1     7.9
  Subsidy39.1       66.327.269.7
  Allotment to LGUs    221.7250.5        28.8     13.0
  IP    296.7     292.3          (4.4)       (1.5)
  TEF      21.8       17.6(4.2)(19.3)
Capital Outlays289.9306.616.75.8
  Infra & Other CO223.3     237.314.06.3
  Equity0.71.50 .8124.3
  Cap. Transfers to LGUs      65.9       67.81 .9       2.9
  CARP-LO          0           0            0
Net Lending16.013.2(2.8)(17.6)

November net lending topped at P3.8 billion in 2014, which was comprised of a loan to the National Development Company (NDC). This is compared to the P12.0 billion in advances made to the Home Guaranty Corporation (HGC) in 2013.

Abad said, “Though agencies were slower to use their NCAs in November, we’re confident that spending in December 2014 would have ended on a strong note. What’s more, we feel government expenditure is on the right track for 2015. We can attribute this to the release of employee Year-End Bonuses, the passage of the 2014 Supplemental Budget, and the recent Supreme Court ruling on the Disbursement Acceleration Program (DAP).”

In terms of allotments made by DBM to agencies, the report said 95 percent of the P2.265-trillion 2014 National Budget had already been released by the end of November—higher by 12.6 percent than in November of 2013.

Abad said, “Thanks to the General Appropriations Act as-Release Document (GAARD) regime, the DBM ensured the 2014 National Budget was made available to the agencies in a timely manner. This quick release, together with the increase in disbursements as of November’s end, helped us get some momentum to push government spending for projects and programs.”

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