Palace clarifies reports on government spending

Malacañang has clarified reports that the government has spent almost 84 percent of the 2016 National Budget as embodied in the General Appropriations Act (GAA).

“Allegations of the government’s ‘mad rush to spend during the election season’, leaving the incoming administration with ‘only 16 percent of the National Budget’ are untrue and without factual basis. These statements only reflect a lack of knowledge and understanding on how the National Budget is actually spent,” Communication Secretary Herminio Coloma, Jr. said during a press briefing at the Palace on Tuesday.

Secretary Coloma said the Aquino administration “has always adhered to the principles of sound fiscal management in handling the people’s funds and shall pass on to the incoming administration a robust, liquid and financially stable national coffers”.

The Department of Budget and Management (DBM) last week announced that it has already released about P2.5 trillion to government agencies, the amount representing 83.5 percent of the total P3.002-trillion 2016 National Budget.

Coloma said the complete budgeting process involves three steps —  release, obligation, and disbursement.

“In our national budgeting process, the word ‘release’ simply means ‘authority to obligate’ what is in the General Appropriations Act. It does not equate to disbursements or actual spending as the funds still need to be obligated first before these can be disbursed by the government agencies,” he explained.

“After the budget is released, the concerned government agency must submit and secure approval for a work and financial plan from the DBM and this serves as the basis for obligating certain amounts for specific projects. Once these projects have been deemed obligated, the agency will secure Notices of Cash Allocation (NCAs) from the DBM, which they would present to the Bureau of Treasury to obtain checks,” the Palace official said.

Coloma noted that out of the total of the National Budget, about P1.336 trillion or 45 percent are allotted for personnel services (P811.8 billion) and miscellaneous and other operating expenses or MOOE (P524 billion), which are disbursed monthly based on the existing work and financial plans of government agencies that passed through the scrutiny of Congress during the budget deliberations.

“Buwan-buwan lang po ito dini-disburse dahil buwan-buwan po ang pasweldo ng pamahalaan. Hindi po pupwede na ire-release ito o idi-disburse ito na lagpas doon sa kasalukuyang buwan. At dahil nasa ika-limang buwan lang po tayo, hindi po mangyayari na ang pasweldo para sa buong taon ay nai-release na o naibigay na. Hindi po mangyayari iyon,” he stressed.

He added that while it is true that releases have reached more than P2 trillion, total funds obligated and covered by NCAs have reached only P464.33 billion as of the first quarter of the year.

Out of this amount, he said, P411.4 billion has been utilized to get checks from the Treasury while the remaining P53 billion is still with the agencies.

“Uulitin ko po, mauuna ang release. Sa salita po natin, ang ibig sabihin ng release ay binigyan ng authority para po magamit ang pondo. Susundan po ito ng pangalawang hakbang: obligation. Ang obligation, makukuha lang ito kapag nakapag-sumite na at kapag nakakuha na ng approval from DBM of the corresponding work and financial plan na patungkol doon sa gagastusin na ino-obligate. Kapag in-approve po ito, bibigyan ang ahensiya ng DBM ng NCA at pagkatapos ang NCA na ito ay pwedeng gamitin para kumuha ng cheke. Kapag nakuha po ang cheke, doon at doon palang magaganap ang sinasabi nating aktuwal na paggagastos o disbursement,” said Coloma.

The Palace official also noted that in terms of Capital Outlay, “the GAA requires all government agencies to comply with existing rules on procurement, such as a schedule of payments for payroll items and the schedule of payments for capital outlay based on the percentage of completion of a particular project”.

Sinabi ko na dalawang items: personnel salaries at MOOE account for 45 percent. So doon sa 55 percent, kasama na po diyan ‘yung capital outlay. At ‘yung capital outlay, bago po iyan mai-release — uulitin ko po ‘yung paliwanag: first step lang po ang release, which is simply an authority or an allotment. Ang second ay obligation, kinakailangang magsumite pa ng approved financial plan para maibigay ‘yung obligation as evidenced by an NCA o ‘yung notice of cash allocation. At pangatlong step lang ang actual disbursement,” he said.

He further said that one of the budgetary reforms implemented by the Aquino administration in 2014 is to treat the GAA itself as the release document, enabling government agencies to fast-track the implementation of vital projects and programs and sustain the growth momentum.

“All disbursements from the National Budget are subject to stringent auditing and accounting rules and regulations,” he pointed out.

Coloma also said that contrary to the claims of the United Nationalist Alliance, the government has already released P842.5 million to augment the Quick Response Fund for El Niño-related programs, such as the “purchase of family food packs for pre-positioning and disaster augmentation, cash or food for work programs, shelter assistance and additional relief supplies” for affected communities. PND (jm)