Projecting the national budget to grow by P1 trillion within two years, from P2.682 trillion in 2016 to P3.767 trillion in 2018, Senate President Pro Tempore Ralph G. Recto on Wednesday voiced concerns that government agencies do not have have “the capacity to spend their allocations”.
Recto sought assurance from the Duterte administration’s economic managers that the agencies can “spend the money in full, for the right things and on time” during the initial Senate deliberations on the 2018 spending program.
Recto, citing official figures, aired apprehensions over “the disturbing trend of overappropriations and underspending”.
For instance, the senator noted that the budget for personal services, of which P746 billion was spent in 2016 out of a budget of P794 billion, “or an underspending or over-appropriation of P48 billlion” allocated for payroll and other compensation expenditures for state employees and pensioners.
Moreover, Recto raised the case of maintenance and other operating expenses (MOOE), whose disbursements, he added, reached P1.011 trillion out of the P1.127 trillion provided for in the 2016 budget, “or a slippage of P116 billion”. He noted that MOOE covers non-salary operating expenses like utilities, supplies, rent and grants.
“Even in allocations for debt service we overdo it,” Recto said, recalling that the previous administration “over-requested by asking Congress to allocate P392 billion to service debts but only P304 billion was spent, or an excess of P90 billion.” He surmised this happened because the officials concerned “bloated forex assumption in computing interest payments”.
Recto added: “The worst manifestation of underspending is in capital outlays, largely infrastructure.” For instance, Recto recalled that in 2016, the Executive asked for P1.175 trillion, but managed to obligate P823 billion, or a shortfall of P352 billion.
“In all, unreleased appropriations reached P63.43 billion in 2016, on top of the unobligated allotments of P544.53 billion.” The Senate leader lamented that “the utilization rate is low”.
“We betray the people when we are slow, or if we fail, in returning the taxes they have paid, through the national budget,” Recto said. “The results penalize a people who have the right to expect the things promised in the budget, and the fault lies in the tendency of officials to ask for more than they can spend.” He added, “Most of the time they even complain the fund is not enough but, at the end of the day, the appropriation is not used.”
Recto raised the possibility that the bureaucracy may have reached “peak capacity” in implementing projects and programs. “This could be a result of a technical deficit, which, in the case of agencies with infrastructure assignments, is “due to lack of engineers and technical people,” the senator said.