BUDGET Secretary Florencio Abad said on Tuesday that the government may incur a “minimum” deficit of  2.6 percent of the gross domestic product (GDP)  by the end of the year, or slightly lower than its 3 percent goal  for the year.

Abad said in a media forum that the government intends to spend P260 billion in the second semester as it ramps up spending to make up for underspending in the first half of the year.

At the Senate, two senators questioned the Aquino administration’s underspending in the first half of the year, which, they said, was supposedly responsible for the economic slowdown in January to June.

Sen. Franklin Drilon, chairman of the Senate Finance Committee, said the slack in infrastructure spending in the first half of the year resulted mainly to a GDP growth of 4 percent, below the government’s estimate of 4.5 percent to 5.5 percent. Economic growth in the first quarter was recorded at 4.9 percent, while second-quarter growth decelerated to just 3.4 percent.

“The criticism being hurled, which has some validity, is the underspending this year which has caused the contraction of our public spending and has affected our achieving the GDP growth,” Drilon said during a hearing on next year’s proposed P125-billion budget of the Department of Public Works and Highways, which holds the major bulk of state infrastructure projects.

Sen. Edgardo Angara, on the other, said the Aquino administration should spend what has already been approved for the necessary infrastructure and public-works projects that are “crying out” for execution and implementation.

“That bothers me...why we are hoarding so much public money and as I understand it in public finance, money unspent is money useless, useless asset,” the senator from Aurora province said.

Asked how much the government intends to spend for the rest of the year, Abad said, “We should be able to hit about at least P260 billion more of spending…for the whole year.”

“I think the spending process has really ramped up and we foresee in the second semester a bigger spending which would allow us to raise the deficit spending level so that hopefully, maybe, we may not be able to reach 3-percent deficit this year but a significant number anywhere from 2.6 percent going up,” he said. He said the government’s deficit spending in the first six months of the year was at P17 billion versus the programmed P152 billion, but has begun to recover in July when deficit spending was at P26 billion “which is bigger than all of the [first] six months combined.”

Abad said the spending figures in August “would be along the range or even better than July.” He said the Development Budget Coordination Committee will meet after President Aquino’s visit to the United States and Japan in the next two weeks to see whether adjustments have to be made on the government’s 2011 macroeconomic assumptions, as instructed by the Senate.

He reiterated the government’s confidence that it would meet the 5-percent to 6-percent growth goal assumed in the 2011 budget.

“This budget was premised on a 5-percent to 6-percent growth and I’m confident that that 5 to 6-percent growth is well within reach of this administration,” Abad said.