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Legarda to Review Infra, Other Programs with Low Obligation Rate

August 15, 2018

Senator Loren Legarda today said that the Committee on Finance, which she chairs, will not only scrutinize the proposed Php3.757 Trillion national budget for 2019 but also review the performance of agencies, especially those with infrastructure programs that have registered low obligation or disbursement rate throughout the years.

“The proposed 2019 national budget is now cash-based as a way to ensure efficient spending of public funds and implementation of projects. But as we look into the 2019 budget of agencies, we will also exercise strong oversight and review how the 2018 budget was spent and implemented,” said Legarda.

Legarda noted that among the programs of government that have registered low obligation and disbursement rate throughout the years include: the Health Facilities Enhancement Program (HFEP) under the Department of Health (DOH), the Farm-to-Market Roads (FMR) projects under the Department of Agriculture (DA), and the Basic Educational Facilities Fund (BEFF) under the Department of Education (DepEd).

From 2008 to 2018, the HFEP had total appropriations worth Php138 billion but only Php73 billion were obligated and only Php13 billion of which, or less than 10% of the total funds, were actually disbursed.

As a result, the Department of Budget and Management (DBM) allotted only Php50 million under the 2019 budget. The amount will be used for the monitoring of previous years’ implementation of HFEP and operations of HFEP Central Office implementation unit.

The HFEP is the upgrading of health facilities through investments in infrastructure and medical equipment.

For the BEFF, or the school building program of DepEd, budget allocation for 2019 was reduced to Php35 billion, significantly lower than its 2018 budget of Php105 billion. The DBM cited low obligation and disbursement rate for the reduced allocation.

In 2015, BEFF was worth Php54 billion, but only Php39 billion were obligated and Php7 billion were disbursed. In 2016, budget was Php82 billion, of which Php59 billion were obligated and only Php16 billion were disbursed. In 2017, of the Php119 billion appropriated to the fund, Php114 billion were obligated, and only Php7 billion were disbursed.

Meanwhile, for the DA’s FMR projects, the DBM has allocated Php10 billion for 2019.

The DA’s disbursement rate for FMR in 2014 was very low at 5.9% or only Php708 million of the Php12 billion appropriations. While disbursement rate improved in 2015 at 42.8%, it went down again to 39.1% in 2016, and to 38.1% in 2017.

The DBM has reduced the budget of the aforementioned programs under the proposed 2019 national budget as it will now follow a cash-based budgeting system. Under this system, all agencies must not only obligate funds but also ensure the actual completion of projects and delivery of goods and services within the fiscal year.

“All these unspent funds mean missed opportunities and promises unmet. This is why the Senate supports the cash-based budget, because we should only fund what we can implement on time. This system will not only help discipline the bureaucracy but also ensure a more effective and efficient government,” Legarda concluded.