NextGen Day

Manila, Philippines – Department of Budget and Management (DBM) Secretary Amenah Pangandaman has issued a directive to government agencies to submit catch-up plans to counteract the underspending observed in the first half of 2023.

The circular letter, designated as 2023-10 and released on August 9, was prompted by data from the Bureau of the Treasury (BTr) revealing that government expenditures during the initial six months of this year totaled PHP2.411 trillion. This figure falls short by PHP170.5 billion, or 6.6%, of the PHP2.582 trillion allocated for the same period.

As of the end of June this year, government spending registered a modest 0.42% increase compared to last year’s PHP2.401 trillion.

Pangandaman emphasized that this year’s PHP5.268 trillion national budget serves as a vital instrument to fund programs, activities, and projects (PAPs) aimed at supporting the nation’s economic transformation, with a core objective of fostering inclusive and sustainable growth.

She underscored that this year’s spending target is instrumental in realizing the government’s ambitious 6-7% gross domestic product (GDP) growth projection for the current year.

“While the initial fiscal data attribute the shortfall in spending to ongoing projects and program implementation across various government agencies, coupled with billing or payment concerns, it remains essential to identify the underlying causes and take necessary actions to address the situation,” Pangandaman emphasized.

Acknowledging the importance of evaluating agencies’ absorptive capacity, she noted, “We consider budget utilization rates (BURs) in assessing the agency’s capacity to employ new funds efficiently. Low utilization rates often indicate an agency’s limited ability to utilize new funds. However, those agencies that need to enhance their utilization rates have committed to presenting catch-up plans during budget deliberations. We are optimistic that their BURs will witness improvement by then.”

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In a concerted effort to rectify the observed underspending, government agencies are heeding the directive from DBM Secretary Amenah Pangandaman. The call for catch-up plans underscores the commitment to optimizing budget utilization for effective program implementation. As the nation strives for inclusive and sustainable growth, this proactive approach demonstrates the government’s dedication to steering the economy toward its ambitious growth targets.

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