Government Spending Hits 13% Growth in 2015; Highest Y-O-Y Growth Since 2012

National government disbursements registered a remarkable 13 percent growth in 2015, just two percentage points shy of 15 percent, the fastest year-on-year growth since 2012. Full-year spending also exceeded the growth posted in 2014 and 2013, at 5.4 percent and 5.8 percent, respectively, closing the year strong with a double-digit growth after two consecutive years.

Actual disbursements in 2015 reached P2,230.6 billion higher by P249.0 billion in 2014—buoyed by the significant improvement in spending in the second half of 2015 growing by as much as 17 percent.

The robust full-year performance is largely contributed by higher disbursements in maintenance and operating expenditures growing by 30.7 percent, and capital outlays increasing by 25.1 percent.

“The 2015 spending figures show that the government has been able to reshape budget priorities toward allocating more resources to social and economic services. Higher disbursement in maintenance as well as capital outlays funded the expansion of programs in social services, defense, and road and transport infrastructure in 2015,” DBM Secretary Florencio B. Abad said.

Abad said the reforms that the budget department has put in place are making headway. These reforms include the comprehensive release of the budget and the measures to accelerate procurement, including the creation of full-time BAC personnel. All these allowed line agencies to obligate more starting the second quarter.

 As a result, agency utilization of cash allocations accelerated starting the second quarter at 89.0 percent from around 82.0 percent in Q1 before jumping to 96.0 percent and 97.0 percent in Q3 and Q4, respectively. This improvement translated to an increasing trajectory of government disbursements –from only 4.5 percent annual growth in Q1 to 12.4 percent in Q2, ramping up to a 19.3 percent high in Q3 and ending up at 14.2 percent in Q4. 

Abad also noted that the department found it crucial to fix spending bottlenecks through the creation of Full-time Delivery Units (FDUs), which track the progress of project implementation and troubleshoot implementation issues. As a result, agencies were able to utilize their budgets better attaining a 97 percent cash utilization rate in the last quarter of the year.

Abad added that the strong spending performance is a good indicator that priority programs supported in the national budget are being implemented nationwide and that public resources are being spent more efficiently.

Based on recent figures released by the Philippine Statistics Authority, he also noted that the government’s huge investments in public infrastructures, mainly for road and transport development, boosted public construction to 20.6 percent growth in 2015 compared to only 5.4 percent in the private sector. As a result, the construction industry still grew by 8.9 percent in 2015 despite the slowdown in private construction.

“One of the drivers in the country’s economic growth is government spending, achieving a 5.8 percent growth in 2015. Knowing that critical role, we will work towards sustaining the growth momentum this year as we fast-track key programs and projects to ensure that this will benefit the Filipino people,” the budget chief added.

 Based on the fiscal report by the Bureau of Treasury (BTr), spending also picked up in December, with actual disbursements reaching P238.7 billion surpassing the target by 15.6 billion. As a result, national government posted a P75.1 billion deficit for December, 62 percent or P28.8 billion higher than the deficit recorded in the same month last year.