Philippines Government Cash Utilization Remains at 94% Despite Increased Allocations

MANILA, Philippines — As of the end of October, the Philippine government’s utilization of released cash allocations remained stagnant at 94%, despite a slight increase in the total allocations, according to the Department of Budget and Management (DBM). This scenario highlights a critical aspect of public financial management, reflecting on the efficiency and effectiveness of government spending.

The DBM data revealed that notices of cash allocation (NCAs) experienced a marginal rise from P3.56 trillion a year ago to P3.6 trillion. NCAs, which are disbursement orders issued by the DBM to government banks for fund releases to various agencies, are pivotal for the implementation of government programs and projects. A higher utilization rate of these allocations is generally indicative of an agency’s greater capacity to execute its plans.

Despite the increase in allocations, there was an unused sum of approximately P209.47 billion. The data showed a varied performance across different government agencies in terms of utilizing these funds. Nearly 75% of the NCA releases, amounting to P2.67 trillion, were secured by line departments, while the remaining P934.34 billion was directed towards other agencies, particularly state-run firms and local governments.

Sector-wise, other agencies successfully used up their entire allocations, which were primarily intended to cover internal revenue allotments, special shares, and other transfers for local government units. However, the line departments recorded a utilization rate of 92%, similar to the rate observed in the same period last year. Among these departments, the Department of Public Works and Highways (DPWH) and the Department of Education (DepEd) received the highest NCAs, with DPWH showing an improved utilization rate of 95% and DepEd using up 94% of its allocation.

The Commission on Audit stood out with a 100% utilization rate. In contrast, other agencies such as the Department of Information and Communication Technology (DICT) and the Department of Migrant Workers recorded notably lower utilization rates of 35% and 39%, respectively.

This data points to a significant gap in the disbursement and utilization of government funds, which is a crucial factor in assessing the effectiveness of public expenditure. The variance in the utilization rates across different departments and sectors underscores the need for more efficient financial management practices to ensure that allocated funds are optimally used for their intended purposes.