Atin Ito First Filipino Community Newspaper in Ontario
Government spending is vital to national growth. It is one of the four components of Gross Domestic Product (GDP). The other three are consumer spending, business investment, and net exports. In the past two years, Statista reports that the ratio of government expenditure to GDP in the past three years ranged from 25 to 27 percent.
The country remains a net importer. Last year, the trade shortfall increased to $58.32 billion from $42.23 billion in 2021. Inflows from foreign direct investments (FDI) decreased to $9.2 billion last year due to the global economic slowdown and high inflation. Consumer spending was the biggest contributor to growth in 2022, registering an 8.3 percent increase, compared to 4.2 percent in 2021.
Given the country’s continuing reliance on imports and the uncertainty in foreign investments, government spending is an important driver of economic growth.
The Department of Budget and Management (DBM) declared to Congress: “The proposed FY 2023 National Budget supports the achievement of the administration’s headline goals: 6.5 percent to 8 percent real GDP growth annually between 2023 to 2028; 9 percent or single-digit poverty rate by 2028; 3 percent National Government (NG) deficit to GDP ratio by 2028; less than 60 percent NG debt-to-GDP ratio by 2025; attainment of middle-income status (at least $4,256 national income per capita.”
Thus, it is billed as the Marcos administration’s Agenda for Prosperity.
Last week, Budget Secretary Amenah Pangandaman called on government agencies to ramp up further on spending and disbursements, as she noted a 90 percent utilization rate of cash allocations from January to April. She said: “We all know that our national budget is the lifeblood of all government programs and projects. The faster we disburse and utilize our funds, the faster we can procure and implement our projects. That’s why we want to remind our agencies to avoid underspending, given our very limited fiscal space.”
The 90-percent utilization rate is equivalent to ₱1.175 trillion. This figure is quite low, considering that as end-April 2023, the DBM has released ₱2.982 trillion or 94.8 percent of total agency specific budgets to various national government agencies. Hence, the $1.175 trillion utilization rate is 39.4 percent of the total amount released, or made available for their use, close to the end of the first semester.
In all, the DBM has released ₱4.518 trillion or 85.8 percent of the ₱5.268 trillion national budget as of April 30, 2023.
Readiness to implement is key. Thus the budget secretary is determined that “only implementation-ready proposals will be included in the 2024 national budget.” This is a familiar refrain heard previously from her predecessors, too. Typically, Congress is constrained to extend the authority to spend to enable agencies to complete programs and projects for which appropriations have been allocated and authorized. This would appear to ordinary citizens as a conundrum, given the widespread impression that “government lacks funds.”
Nearing completion of its first year in office, the Marcos administration should be able to upgrade administrative efficiency and ensure improved service delivery.
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Credit belongs to : www.mb.com.ph
