DBM expects gov’t underspending less than 1% in 2017

January 10, 2018

The Department of Budget and Management (DBM) sees government underspending of less than one percent in 2017 as agencies fear losing their budget.

"Our estimate, underspending is down to less than one percent from about 10 to 15 percent in the past," said Budget Secretary Benjamin Diokno in a breakfast forum on Wednesday.

The government has yet to release government expenditure data for 2017.

Underspending is expected to significantly drop last year because "there is greater sense of urgency on the part of the agencies to spend their money," Diokno said.

Unlike before, he explained that government agencies did not have anymore two years to spend their fund.

"They have only one year, otherwise the money goes back to Treasury," he said.

He noted one of the pending bills in Congress is the budget reform, which is shifting from obligation-based to cash-based now being implemented by the Duterte administration.

Under the old budget system, Diokno explained obligation of an agency was considered disbursed even if there was no output yet. "So that is no longer the case. We have to show result," he said.

He said the budget reform bill has to pass Congress so that the next administration "will not revert back to to the old system."

Diokno said for 2019 budget, the government will fully implement the cash-based budget.

As approved by the Development Budget Coordinating Council last December, the budget level for 2019 is set at P3.4 trillion, with revenue target of P3.134 trillion, projected to be 16.2 percent of gross domestic product, and deficit at 3 percent of GDP or about P574.5 billion.

If the old system will be used for 2019 budget, he said the obligation budget is about P4.2 trillion from this year's P3.767 trillion budget.

Diokno said the 2019 budget will be submitted to Congress on July 23, the day when President Rodrigo Duterte delivers his third State of the Nation Address. Celerina Monte/DMS