Amidst the talk of a re-enacted budget for the first quarter of 2019 due to delay in the transmittal of the General Appropriations Bill (GAB) by the House of Representatives (HoR) to the Senate, the House shifts its focus on alleged government underspending.
Underspending is defined as the difference of programmed disbursements from actual disbursements. It has been a perennial problem of the past administrations. But with the implementation of budget reforms by the Duterte administration, underspending was gradually eliminated.
“There is absolutely no underspending to speak of.” Budget Secretary Benjamin E. Diokno stressed. “The government is ahead in its disbursements. In fact, we are slightly overspending,” he added.
From an annual underspending rate of 13.3% and 12.8% in 2014 and 2015, respectively, it was cut to 2.9% in 2017. In fact, upon assumption of the Duterte administration halfway through 2016, there was an immediate improvement in government spending as underspending was cut to 3.6%.
From January to September this year, actual government disbursements exceeded the program by P62.6 billion or 2.6%. This is because of the front loading and fast-tracked implementation and completion of programs—including those left behind by the previous administration.
Nevertheless, despite the slight overspending, the budget chief expects government spending to normalize in the fourth quarter so as not to exceed the deficit target of 3.0% of Gross Domestic Product (GDP). The reality is, government cannot spend more than what Congress has authorized it to spend.
This improved rate of spending indicates quicker delivery of programs in health, education, and poverty-reduction and the faster implementation and completion of public infrastructure projects.
Incidentally, Congress’ failure to approve the 2019 budget before the end of the year will be a drag to efforts in improving budget utilization and eliminating underspending and result to delay in the delivery of essential public services.