November 25, 2017 | MANILA, PHILIPPINES

DBM sees signs of spending pickup despite fall in cash usage ratio

THE CASH utilization rate of government agencies slowed at the midyear mark, though the Budget department said it is seeing indications of a spending pickup.

The notice of cash allocation (NCA) utilization ratio in the first half of the year was 94.6%, down from 95.7% a year earlier.

This was however an improvement from the end-May ratio of 88.5%.

An NCA is a cash authority issued by the Department of Budget and Management to government offices to cover their cash requirements.

According to Budget Undersecretary Laura B. Pascua, the slowdown at midyear indicates some agencies are still gearing up to spend their allocations.

“I think it took some time for the departments to get their acts together for the year because of the late appointment of heads and some of the new heads wanted to review their systems and expenditure programs,” Ms. Pascua said in a mobile phone reply yesterday.

The Department of Information and Communications Technology -- which was just created last year -- got the lowest ratio at 44.2%.

The agencies that recorded the highest usage rates in the first half were the Office of the Ombudsman at 100%, followed by the Civil Service Commission at 99.8%, followed by the Commission on Elections at 99.4%.

Ms. Pascua however said that there is evidence that spending is starting to pick up, following an election year where disbursements were at its fastest.

“2016 was mostly running on momentum. So 2017 started slow but when we saw in May the surge in spending, then we think that spending is back on track,” she said.

The national government logged a 20% increase in spending to P261.7 billion in May -- which led to an 89% rise in the fiscal deficit to P33.4 billion.

Emmanuel J. Lopez, chair of the Department of Economics at the University of Santo Tomas (UST), likewise expects spending to continue to gain traction this quarter.

“It’s expected that other areas of interest and gov[ernment] bureaucracy will fast-track government expenditure, not for the sake of spending alone but for prompt delivery of basic services,” Mr. Lopez said in an e-mailed reply.

For the second quarter, NCA utilization was 95.5%, which slowed from 95.8% in the same period in 2016. Cash utilization rose however compared to the first quarter’s 93.4%.

Separate data show that budget releases in the second half so far are at 84.3%, or P2.823 trillion of the P3.35 trillion 2017 budget. This was slower than the released 87.2%, or P2.618 trillion of the P3-trillion budget in 2016. -- Elijah Joseph C. Tubayan