Budget chief Pangandaman calls for catch-up plans to address underspending

Budget Secretary Amenah Pangandaman has ordered agencies to submit their respective catch-up spending plans amid the underspending seen in the first half of the year.

In a statement, the Department of Budget and Management (DBM) said Pangandaman issued Circular Letter No. 2023-10, calling for submission of catch-up plans “to facilitate budget execution for the rest of Fiscal Year (FY) 2023.”

The Budget chief stressed the importance of government spending and disbursements to the country’s overall economic growth.

Government underspending was among the factors pointed for the slower second quarter economic growth, along with high inflation and elevated interest rates.

The economy as measured by gross domestic product (GDP) grew by 4.3% in the April to June period, slower than the 6.4% growth seen in the first quarter.

The DBM said Pangandaman issued the circular after the government spent below the P2.582-trillion spending program for the first semester, by 6.6% as actual expenditures amounted to P2.411 trillion during the period.

“Consistent with the objectives of the Medium-Term Fiscal Framework, the National Government shall mobilize and utilize public resources in order to gain the maximum benefits and high multiplier effects for the economy,” said Pangandaman in the circular letter.

"Given the sizable FY 2023 national budget, government agencies shall execute their programs and projects as authorized in the annual budget and deliver planned results in a timely manner to help buttress robust economic growth," she said.

At a press conference, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the government catch-up spending will be done through accelerating the execution of government programs and projects, including the delivery of public services, under the 2023 national budget.

The NEDA chief added that government agencies, including local and regional government entities, are encouraged, if not instructed, to formulate catch-up plans, accelerate, and even frontload the implementation of said programs and projects.

Pangandaman, meanwhile, reminded agencies that the DBM considers budget utilization rates in evaluating the absorptive capacity of agencies.

“We view low utilization rate as the agency’s limited capacity to utilize new funds. However, those agencies who need to increase their utilization rates have promised to produce catch-up plans during the budget deliberations. So, we hope that their BURs will increase by then,” said the Budget chief.

The circular letter also seeks to ascertain the underlying causes or reasons for underperformance and undertake measures to address them, according to the DBM.

The Budget Department said the government agencies were also instructed to conduct data analysis on a periodic basis for the identification of agency programs and projects with historical trends of low disbursement rates.

This is to compare actual performance versus specified measures and targets and identify leading indicators for each program, sub-program and project to signal the need for catch-up plans for delays or underperformance, it said.

The DBM said agencies shall then come up with delivery and execution strategies to address actual implementation bottlenecks/ delays of these programs and projects and submit to the DBM the following: latest available financial and physical accomplishments; status of major/flagship programs/projects under Fiscal Years 2022 and 2023, particularly those with significant budgetary allocations; and "catch-up plans" to address the bottlenecks and reach their respective physical and financial performance targets for the year.

“These measures are to ensure efficiency in budget utilization to achieve maximum benefits and high multiplier effects for the economy,” said Pangandaman.

The DBM said the reports will then become the basis for the release of the balance of programmed appropriation and revision of plans/targets, as necessary.—AOL, GMA Integrated News