The government needs to disburse a total of P170 billion a month in a bid to ramp up the economy and meet the programmed expenditure level of P1.617 trillion by year-end, Senator Franklin Drilon said Wednesday.
Drilon, chairman of the Senate Finance Committee, said that accelerated spending plans during the remaining months of the year could translate to next year’s growth, as President Benigno C. Aquino III unveiled a P72-billion stimulus program to boost the economy.
“Personally, I’m not very optimistic that the government can spend P170 billion per month until December. That remains to be seen,” said Drilon.
“I express serious doubt on the ability of the government to accelerate spending… given the January-August disbursements,” said Drilon during a briefing by the Development Budget Coordination Committee.
January-August disbursements stood at P947.2 billion. The slack in state spending resulted to an economic growth of only 4% in the first half, below the target of 7-8%.
“Given the lateness of the year, the effect on the domestic economy due to this accelerated public spending may be felt next year,” Drilon told economic managers as he expressed concern on the underspending.
Drilon noted that economic managers may be prioritizing prudent spending to manage budget deficit for a better credit rating.
Apart from the stimulus package for infrastructure and reconstruction plans, Budget Secretary Florencio “Butch” Abad said that state agencies with infrastructure projects have been told to rollout the programs immediately. Abad added that Public Works Secretary Rogelio Singson “committed” that about P80 billion worth of projects will be implemented by December.
Despite Drilon’s misgivings, economic managers are confident that accelerated spending in the last quarter would help the government meet its programmed GDP growth of 4.5-5.5% this year, a revision from an earlier 5-6% growth.
Socioeconomic Planning Secretary Cayetano Paderanga said sans the accelerated spending programs, GDP growth this year would be lower at 4.2-5.2%.
Abad said underspending was primarily due to the “realignments” of 785 projects included in this year’s national budget. He said that “some of the programs” included in the accelerated spending this year would extend next year.
“Continuing the implementation of the projects next year will no longer impact on next year’s programmed deficit,” said Abad.