Addressing Government Budget Mismatch and Performance
MANILA, Philippines — The government’s budget mismatch between physical and financial performance remains a pressing issue. The Congressional Policy and Budget Research Department (CPBRD) recently highlighted this concern, emphasizing the need for a thorough review of how agencies meet their targets relative to budget spending.
CPBRD noted that the Development Budget Coordination Committee (DBCC) first flagged the mismatch in 2023, yet the problem persists. Some departments surpass their physical performance goals but struggle to fully utilize their allotted budgets. This budget mismatch demands immediate attention to ensure taxpayer funds are efficiently used.
Scrutinizing Performance Indicators for Better Budgeting
Sources familiar with the matter said Congress should champion improved budgeting practices by carefully examining performance indicators. According to CPBRD, lawmakers must engage agencies in deeper discussions about the quality and relevance of these metrics within the annual National Expenditure Program (NEP) and the General Appropriation Act (GAA).
“A major concern identified in the DBCC’s Annual Fiscal Reports is the mismatch between the physical and financial performance of Departments (DBCC, 2023). Some Departments continue to exceed their performance targets even with persisting concerns on anemic budget utilization,” officials reported.
Recommendations to Align Budget with Fiscal Goals
CPBRD put forward several recommendations to enhance fiscal discipline, allocative efficiency, and operational efficiency. These include prioritizing expenditures that boost productivity and promote private-sector-led growth, such as investments in education, health, social services, and infrastructure.
Local leaders noted the importance of rationalizing government spending by considering agencies’ absorptive capacities and reducing undisbursed funds. They also emphasized empowering local government units (LGUs) through budgetary support while encouraging high-income LGUs to increase spending on social and economic services.
Improving Budget Utilization and Project Implementation
Community members stressed the need to prioritize shovel-ready projects and swiftly implement debt-funded initiatives to avoid delays. Addressing structural challenges in project execution will further improve budget utilization efficiency.
Additionally, mainstreaming Program Convergence Budgeting can consolidate fragmented programs across agencies, helping achieve the Philippine Development Plan’s common socioeconomic goals.
Department of Education’s Budget Utilization Challenges
Despite the Department of Education (DepEd) showing a high average budget utilization rate, CPBRD observed low obligation and disbursement rates in specific programs. Obligation rates (OR) represent funds committed to projects, while disbursement rates (DR) reflect actual payments made.
For example, since 2022, DepEd’s computerization program recorded ORs between 23% and 50%, and feeding programs ranged from 65% to 81%. More worrisome is the textbook delivery program, which had disbursement rates as low as 11% in 2023 and 17% in 2024.
“Even more concerning are the PAPs (priority programs, activities, and projects) with DRs lower than 50%, such as the delivery of textbooks and other learning materials (11% to 17% in 2023 and 2024), and school-based feeding (48% in 2024),” officials reported.
These inefficiencies undermine value for money and operational effectiveness, raising concerns about the government’s ability to convert budgeted funds into tangible public services.
DepEd, currently led by Secretary Sonny Angara, was also headed concurrently by Vice President Sara Duterte from June 2022 to June 2024. The department’s past failure to deliver laptops in 2023 further exemplifies its budget utilization challenges.
Other Agencies Facing Budget Utilization Issues
Aside from DepEd, the Department of Health (DOH) showed mixed results. While its Medical Assistance to Indigent and Financially Incapacitated Patients (MAIP) program had relatively high obligation and disbursement rates, the Health Facilities Enhancement Program (HFEP) suffered from low disbursement.
The Department of Information and Communications Technology (DICT) also faced low disbursement rates in key programs. In 2023, DRs were recorded at 6.7% for the National Government Data Center, 9.8% for the National Broadband Plan, 21.2% for the National Government Portal, and 24.2% for the Free Internet Wi-Fi initiative.
Moving Forward with Greater Budget Transparency
Officials urge Congress and government agencies to prioritize transparency and efficiency in budget implementation. Greater scrutiny of performance indicators, coupled with strategic spending and project execution, will help close the gap between budget allocation and actual results.
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