Budget and Management Secretary Florencio B. Abad today announced that national government spending in July 2011, amounting to P133.45 billion, was the highest monthly spending level attained so far this year.
This level is only 1.59 percent lower than P135.60-billion recorded in July 2010. Net of interest payments, July 2011 disbursements have reached P92.25 billion, catching-up with the P92.84-billion spending recorded in the same month of last year.
“Our interventions to speed-up spending and implementation of programs and projects are now taking effect. We’re seeing that departments and agencies will catch-up significantly with their targets in the last five months of the year,” he said.
Abad also noted that departments and agencies have also exhibited a marked improvement in the utilization of disbursement authorities via Notices of Cash Allocation (NCAs) to 99.5 percent in July. In comparison, NCA utilization in the past 6 months was 91.4 percent.
He also noted that from a fiscal gap of P17.23 billion in the first six months of 2011, the P26.48-billion recorded in July alone has increased the cumulative deficit so far to P43.713 billion. The full-year deficit target is 3 percent of gross domestic product, or equivalent to P300 billion.
“We are still pushing hard so our deficit spending level will be as close to the P300-billion deficit target. This is particularly necessary in light of the instability and slowdown in the global economy,” the Budget Chief said.
“For this reason, we must fast-track the implementation of critical programs and projects in the remaining five months. If necessary, we will augment funding for fast-moving projects that generate high economic multipliers,” he said.
Cumulative disbursements in the first seven months of the year reached P832.3 billion, which is 48.6 percent of the full-year disbursement program of P1.711 trillion. The seven-month spending performance was 9.96 percent lower than the P924.4-bilion recorded year-on-year:
- Interest Payments amounted to P175.7 billion, which is P13.8 billion or 7.26 percent lower than last year’s P189.46, because of government’s improved liability management and better foreign exchange rates;
- Maintenance Expenses as of July totalled P98.1 billion, which is P11.2 billion or 10.3 percent lower year-on-year. However, the gap has narrowed, from 12.6 percent as of June, because of the release of increased provisions for the Comprehensive Agrarian Reform Program;
- Infrastructure and other capital outlays amounted to P64.5 billion, which is P91.5 billion or 58.7 percent lower year-on-year, due to lower demand for the settlement of accounts payables for projects of the Department of Public Works and Highways (DPWH). DPWH reported that as of August 15, it has obligated 56 percent of P123.88 billion in allotments it has received, an improvement from its obligation rate of 34 percent as of June 30.
- Tax subsidies, which amounted to P15.5 billion as of July, were lower by P11.4 billion or 42.2 percent year-on-year, as import requirements in 2010 were higher.
- Meanwhile, Personal Services spending has increased by P8.7 billion or 3.3 percent to P273.6 billion as of July because of the implementation of salary increases under the Salary Standardization Law 3.
- Subsidies to Government-Owned or -Controlled Corporations have also grown by P6.4 billion or 64.7 percent primarily due to releases for the fuel requirements of the National Power Corporation-Small Power Utilities Group and of the 2010 allocation for health insurance premium subsidies for indigents.
- Transfers to local government units (LGUs) has increased by P13.2 billion or 19.3 percent to P176.1 billion mainly due to higher internal revenue allotment shares of LGUs this year and for the monetization of prior years’ obligations to LGUs.
- Net lending also expanded by P8.4 billion or 171.6 percent to 13.3 billion due to advances for the National Food Authority to cover its short-term debt obligations.
As of July, the DBM has already released allotments worth P1.298 trillion or 79 percent of the P1.645-trillion General Appropriations Act of 2011.
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