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Budget utilization rate hits 91% at end of May

THE cash utilization rate of government agencies hit 91% at the end of May, the Department of Budget and Management (DBM) said.

The DBM said the National Government, local governments and state-owned companies used P1.57 trillion of the P1.71 trillion worth of notices of cash allocation (NCAs) issued as of the end of May. This left P146.18 billion in unused allocations.

The utilization rate was behind the pace of the 93% rate set a year earlier.

NCAs are a quarterly disbursement authority that the DBM issues to agencies, allowing them to withdraw funds from the Bureau of the Treasury to support their spending needs.

At the end of May, line departments used P1.1 trillion or 88% of their allotments, leaving P144.1 billion unused.

The only agencies to post a 100% budget usage rate were the Joint Legislative-Executive Councils and the Commission on Elections.

The Department of Migrant Workers had the lowest usage rate of 42% at the end of May.

Meanwhile, budgetary support to government-owned companies was 100% used, while allotments to local government units (LGUs) posted a utilization rate of 99%.

Budget Secretary Amenah F. Pangandaman said agencies are improving their utilization this year.

“We’re happy to note that the utilization rate of departments is higher, around 70-80%. They are getting used to procurement, planning of projects, and implementations,” she said during the Kapihan sa Manila Bay forum earlier in the week.

However, she said the late budget of the Philippine Health Insurance Corp. (PhilHealth) affected utilization performance.

“The bulk of that amount is the budget of PhilHealth. Last year, they requested early. This year, the requests came in late,” she added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the slower utilization rate was due to election-related spending in 2021.

“The faster budget utilization a year ago may have to do election-related preparations especially before the election spending ban (which resulted in) speeding up the completion of various infrastructure and other projects,” he said in a Viber message. 

Last year, the public works spending ban was in effect between March 25 and May 8. Spending bans are designed to deter politicians from using public resources for their election campaigns.

“The slower budget utilization this year may also reflect the (devolution) to local governments from the National Government of the various projects and programs,” he added, noting that some LGUs may still be adjusting to the additional responsibilities.

At the end of May, the DBM had released P4.68 trillion or 88.9% of the 2023 national budget, slightly ahead of the year-earlier pace of 88.8%. — Luisa Maria Jacinta C. Jocson

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