2019News

Crunch time for gov’t spending as DBM pressed to issue budget circular

By Reicelene Joy N. Ignacio, May 15 2019; Business World

https://www.bworldonline.com/crunch-time-for-govt-spending-as-dbm-pressed-to-issue-budget-circular/

Image Credit to Business World

THE Department of Budget and Management (DBM) needs to issue a circular for the next budget in order immediately to get the ball rolling on government programs that were stalled by the delays in Congress passing the 2019 budget, the Department of Finance (DoF) said Wednesday.

“There is an urgent need for the Department of Budget and Management (DBM) to issue the Budget Circular for the (2020) General Appropriations Act (GAA) promptly in order to continue infrastructure projects that have been delayed due to the budget deadlock in Congress,” the DoF said in a statement.

The budget circular calls on government agencies to submit their proposed spending plans for consolidation into the budget bill,

The DoF noted that the government underspent by P69.5 billion in the first quarter due to the delay in the passage of the 2019 GAA, which economic managers blamed for the growth slowdown to 5.6% during the period.

The DoF said that expenditure declined by 0.8% in the first quarter after growing 25.4% a year earlier.

As a result of the lost spending, the budget deficit as a share of gross domestic product (GDP) fell to 2.1% from 3.9% a year earlier.

Asked when the budget circular can be issued, DBM Assistant Secretary Rolando U. Toledo said in a mobile message, “We are targeting to issue within the week and hopefully, we can issue if not today, tomorrow.”

Before the end of first quarter, Finance Secretary Carlos G. Dominguez III said that even with the signing of the P3.66-trillion budget, it is impossible for the government to achieve its 6%-7% GDP growth target due to the election ban on government projects, with the upcoming rainy season also posing delays for construction.

The budget, which was proposed to spend P3.757 trillion, was cut down to P3.66 trillion after President Rodrigo R. Duterte vetoed a P95.3 billion worth of allocations mainly for the Department of Public Works and Highways (DPWH).

The DBM, however, said that the veto will not affect the government’s flagship projects.

“Preliminary analysis of the impact of the direct veto suggests that the effect can be minimal since the vetoed items pertain to local infrastructure projects after the bicameral approval of the FY 2019 General Appropriations Bills and do not affect the national government’s flagship infrastructure projects,” DBM said in its outlook statement.

“While in general, it could still result in lower disbursements, the reduction may partly be offset by payables from prior years’ infrastructure projects, changes in the appropriations of non-DPWH projects and potential payables from continuing appropriations and unobligated allotments due to the extension of the validity of the 2018 appropriations for MOOEs (Maintenance and Other Operating Expenses) and CO (Capital Outlats),” DBM added. — Reicelene Joy N. Ignacio

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