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Senators zero in on poor gov’t spending, revenue leakage

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THE SENATE Finance committee on Thursday grilled state economic officials on low disbursement and revenue leakages as the chamber began hearing the proposed P4.1-trillion national budget for 2020.

Senator Emmanuel Joel J. Villanueva, vice-chairman of the committee, questioned the absorptive capacity of state offices that will receive bigger allocations despite a low disbursement record.

“Among the biggest gainers in this year’s budget across the different sectors you presented this under the NEP (National Expenditure Program) is the communications, road and other transport sector, whose budget is to increase by 27%, equivalent to an additional hundred billion,” Mr. Villanueva said, addressing representatives of the Department of Budget and Management (DBM).

“From P496 billion to P630 billion, however, ito pong mga concerned agencies… have been constantly and consistently showing very dismal utilization performance.”

The Development Budget Coordination Committee was holding a briefing in the Senate on the proposed 2020 national budget, which is 12% more than the P3.662-trillion budget this year and is equivalent to 19.4% of projected gross domestic product (GDP).

Among others, Mr. Villanueva noted that the Department of Public Works and Highways spent just 39.72% of its P752.16-billion allotment in 2018.




Acting Budget Secretary Wendel E. Avisado said the Executive pushed a cash-based budget for 2019 — based on the spending record of state offices and which will force them to disburse allocations within the fiscal year — precisely to address the government’s chronic underspending. Before 2019, obligation-based budgeting provided for validity of funds for up to two years.

“The possible solution that we were looking at is the adoption of a cash-based budgeting system. We wanted to make sure that whatever is funded for the year is really implemented within the year,” Mr. Avisado told senators, while citing “[t]he possible enactment for example of the budget modernization law… to shift to the one year validity of appropriation to encourage spending agencies to utilize their funds within the year and reduce an obligated balances.”

In the 17th Congress that ended on June 3, the budget reform bill secured final-reading approval in the House of Representatives in March 2018, but failed to get Senate approval.

The same hearing saw Senator Panfilo M. Lacson, also committee vice-chairman, citing a P82.181-billion “discrepancy” between the Bureau of Customs’ revenue collection from products brought in from China and the regional giant’s exports to the Philippines, according to a 2017 World Bank report.

Department of Finance officials blamed leakage due to undervaluation and tax evasion.

This, the officials said, is why it is crucial to approve remaining tax reforms.

“The executive branch will continue to be engaged with the legislature in passing the remaining tax reform packages that will generate additional revenue streams for government to fund social amelioration programs,” Finance Undersecretary and chief economist Gil S. Beltran told senators.

Latest available DBM data showed state infrastructure and other capital outlays dropping by 11.7% to P311.4 billion last semester from P352.7 billion in 2018’s first half, and missing a P392.9-billion target for the period by 20.8%.

The government plans to spend P861.2 billion on infrastructure this year, 24% of the P3.662-trillion national budget that was signed into law on April 15, four-and-a-half months late.

The government and private economists blamed the delayed budget for a disappointing 5.5% GDP growth last semester, that compared to an already tempered 6-7% official full-year goal for 2019.

For next year, the Executive branch has proposed P972.5 billion in infrastructure funds, about 12.9% more than this year’s allocation and also 24% of a proposed P4.1-trillion national budget. — Charmaine A. Tadalan

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