Government spending hits highest year-on-year Q3 growth

MANILA, Dec. 7 (PNA) — National government spending continued to pick up with another two-digit year-on-year growth of 16.6 percent this September to wrap up a strong quarterly growth of 19.3 percent, the biggest quarterly growth rate since 2012.

According to the latest report of the Department of Budget and Management (DBM), spending for September reached PHP186.3 billion, surpassing the PHP160 billion disbursements in 2014 by 16.6 percent.

This is the third consecutive month within Q3 and the fourth month in the year that spending accelerated by a two-digit margin.

This resulted in a remarkable spending performance of PHP558.5 billion in the third quarter, a 19.3 percent increase or PHP90.2 billion higher than the PHP468.4 billion gained during the same period last year.

It was also better than the 4.5 percent and 12.4 percent growth in the first and second quarters of 2015, respectively.

Cumulative spending as of end September was at PHP1,630.5 billion, a growth of 12.0 percent or PHP174.5 billion more than the spending in the same period in 2014.

Disbursements for September were fanned by the sustained growth in both maintenance and capital expenditures.

“Our infrastructure spending leaped to PHP29 billion for September, exceeding by fifty percent what has been disbursed in the same period last year,” said Abad.

Abad added: “Infrastructure spending growth is 57.6 percent year-on-year in Q3, amounting to PHP93 billion compared to PHP59 billion in the same period in 2014.”

The strong infrastructure spending was driven by releases for aircraft acquisition of the Armed Forces of the Philippines (AFP) Modernization Program and infrastructure programs of the departments of Education (DepEd) and Tourism (DOT) implemented by the Department of Public Works and Highways (DPWH), such as the Basic Educational Facilities (BEF) and the construction, repair and rehabilitation of roads and bridges in tourist destinations.

The strong Q3 disbursement performance was also supported by Maintenance and Other Operating Expenses (MOOE) spending, which grew by 46.8 percent year-on-year. This is mainly due to expanded maintenance expenditures in relation to the implementation of the Conditional Cash Transfer (CCT) and other community development programs of the Department of Social Welfare and Development (DSWD), the PAMANA in the ARMM program of the Department of the Interior and Local Government (DILG), and the Bottom-Up Budgeting (BuB).

“This robust third quarter performance shows that our efforts to fix spending bottlenecks are working. Among the reforms that we can credit for this performance is the creation of the Full Time Delivery Units or FDUs in key government agencies to track the progress of priority programs in transport, health and public works and to ensure that the priority projects are delivered on time; the elimination of the SARO through the GAA-as-release-document regime to accelerate procurement; and the significant reduction of lump sums. All these reforms have allowed the DBM to match its yearly average of 98 percent releases,” Abad explained.

Abad said the spending momentum will be sustained until the end of the year. He is optimistic that it is still possible for full-year growth to reach 6 percent, as public spending will play a pivotal role in the economic expansion in the fourth quarter.

Payment of contracts for some big capital projects, which encountered delays, such as the Health Facilities Enhancement Program (HFEP) and the Automated Election System (AES) of the COMELEC, as well as the pressure to finish infrastructure projects from political leaders in the run up to the May 2016 elections will further boost spending in Q4, he said. (PNA)