The Department of Budget and Management (DBM) remains optimistic about reaching the full-year expenditure program despite the weak performance in the first half of 2023.
“The government is optimistic that the full-year spending target is achievable for the rest of the year,” the DBM said in a document posted on its website.
“Based on historical trends and agency spending behavior, disbursements quicken beginning the third quarter and go full steam during the fourth quarter,” the agency added.
As per the most recent Development Budget Coordination Committee meeting, the government has a disbursement program of P5.23 trillion for 2023.
In the first half of the year, total expenditures amounted to P2.41 trillion, P170.5 billion or 6.6 percent below the program for the period of P2.58 trillion.
This dragged growth in the second quarter to 4.3 percent.
“A more robust government spending on maintenance and other operating expense and public construction could have generated more economic activities and induced growth further through secondary multiplier effects,” the DBM said.
“The implementation of catch-up plans is expected to help attain both the P5.228 trillion disbursement program and the six to seven percent real GDP (gross domestic product) growth target for this year. Relatedly, the National Economic and Development Authority estimated that should line departments be able to recover the underspending incurred during the first semester, the impact on second semester growth would be plus 0.8 percentage point on GDP,” it added.
According to the DBM’s latest disbursement report, in June alone, infrastructure and other capital outlays slid to P119.4 billion from P142.9 billion a year ago due to the combined effects of high base, timing of releases to the Department of National Defense (DND) for its Revised Armed Forces of the Philippines Modernization Program (RAFPMP), and outstanding checks recorded for capital outlay-heavy departments.
“It may be noted that infrastructure expenditures in June last year grew by P49 billion (51.9 percent) as substantial disbursements were recorded for the Department of Public Works and Highways (DPWH) after the lifting of election ban. Capital expenditures by the DND in June last year were also significant, covering defense modernization projects. In contrast this year, most of the payables related to the RAFPMP are scheduled this second semester,” the DBM said.
According to the DBM, sizable outstanding checks were recorded in the DPWH and Department of Transportation as of end-June 2023, amounting to P24.4 billion and P11.6 billion, respectively.
These compare to only P18.5 billion and P0.3 billion for the same period in 2022.
The huge outstanding checks recorded may be attributed to billing/payment concerns encountered by line agencies, such as late/incomplete submission of documentary requirements to facilitate release of checks/payments, and contractors’ non-encashment of checks issued, it added.
For the first semester, infrastructure and other capital outlays surpassed the P483.1 billion program by five percent with faster implementation of construction activities and payments for completed infrastructure projects of the DPWH.
Meanwhile, the DBM said in a statement yesterday the government will soon have its own “Shopee/Lazada-style” online platform on which agencies may directly procure supplies and equipment from competent and reputable suppliers.
Budget Secretary Amenah Pangandaman and Dennis Santiago, Procurement Service (PS)-DBM executive director, announced a soon-to-be-launched platform dubbed “eMarketplace” which is part of the proposed amendments to Republic Act (RA) 9184 or the Government Procurement Reform Act (GPRA).
Pangandaman recalled that RA 9184, signed into law 20 years ago, was envisioned to address the lack of transparency and competition, eliminate collusion and political interference, and lessen delays in the procurement process.
“The GPRA was one of the biggest anti-corruption laws in the country, which was, in fact, recognized by no less than the World Bank as a world-class legislation. However, there has been a rapid transformation in technology over the past two decades, and the pandemic propelled the urgency for digital transactions in the country. That’s why our President is correct that we need to make government procurement more attuned to our changing times,” Pangandaman said.
The eMarketplace, which aims to do away with the long, tedious procurement process that has caused delays in the government’s delivery of products and services, will still require suppliers to comply with identified legal, technical and financial requirements to be able to include their offered goods in the system, the DBM said.
“Procurement affects us every day, not just us the government, but the Filipino people. Procurement issues have an adverse impact on public service delivery. We have also been hounded by controversies linked to the Philippine procurement system. Of our total national government budget, up to 25 percent is done via procurement. So, this year, it’s roughly P1.3 trillion. It’s a huge amount,” said Pangandaman.
Santiago noted the government’s indispensable role in procurement.
“The biggest purchaser (of goods and services) is the government, and 18 to 22 percent of GDP is government procurement,” said Santiago.
