Gov’t agencies urged: Spend, spend, spend

MANILA, Philippines — after the delay in the approval of the 2019 budget held back the
start of some infrastructure and social welfare projects, Sen. Sonny Angara on Saturday
urged all government agencies to use the last two months of the year to spend their
remaining allocations to spur economic growth. .Angara noted the Department of Budget
and Management’s report that 96 percent of the P3.67-trillion budget had been released
as of the end of September. Infrastructure spending has reached 92 percent of the full-
year target as of September, while total disbursements have hit 98 percent of the target.

“The agencies have to catch up on their spending so that we can hit our growth target.
The reenactment of the budget was regrettable but as the data has shown, the targets
set are still attainable so we must sustain the momentum,” Angara, who chairs the
Senate’s finance committee, said in a statement. There is still time to catch up on
spending, which would benefit especially the poor, Angara said. “It’s not just infrastructure
but also on the delivery of social services that have faced delays,” he said. “We should
do everything to make sure our people don’t feel shortchanged by the government.” The
administration’s move to deal with government underspending was encouraging, Angara
said. “But we should always strive to hit our targets, especially when it comes to spending
on infrastructure,” he said. “Spending on infrastructure creates jobs and has a cascading
effect across various industries, all of which spurs economic growth.”

In the second quarter of the year, economic growth slowed to 5.5 percent because of the
delay in the enactment of the 2019 budget. Finance officials hope it would rise to 6 percent
in the third quarter. The delayed approval of the 2019 budget was due to squabbles
between the Senate and the House of Representatives over amendments introduced by
the House after the ratification of the bicameral measure of the spending bill.

‘Illusory’ infra program

The low budget utilization by key government departments could also undermine the
Duterte administration’s ambitious P8.4-trillion “Build, Build, Build” program to construct
75 major infrastructure projects, including railways, roads, bridges and airports in six
years. But the program remains “illusory” because the public works and transportation
departments have not implemented many of these projects, according to former
Socioeconomic Planning Secretary Cielito Habito. Briefing three Pampanga business
groups on Thursday, Habito said government agencies “continue to have low absorptive
capacity,” particularly the Department of Public Works and Highways (DPWH) and
Department of Transportation (DOTr), which were below 30 percent as reflected in
Commission on Audit reports. “There’s a big challenge to the implementation of ‘Build,
Build, Build’ because public construction has actually declined rather than increased in
recent quarters. Even after the [2019] budget passage happened, the decline in public
construction actually went deeper than ever before,” he said. “So this suggests that the
budget is no longer the problem but we need an implementation capability or what we call
the absorptive capacity that will really need a lot of attention,” said Habito, an economics
professor of the Ateneo de Manila University. The briefing was organized by the
Pampanga Chamber of Commerce and Industry, Metro Angeles Chamber of Commerce
and Industry, and Clark Investors and Locators Association. Current Economic Planning
Secretary Ernesto Pernia told Reuters news agency the government was “trimming” the
list of 75 flagship projects it had promised to deliver or at least start and “substituting with
others more economically feasible and doable.” The Duterte administration has promised
to usher in a “golden age of infrastructure” by building and modernizing airports and ports,
and spurring the country’s economic growth.

But snags, including the delayed approval of this year’s budget, forced economic
managers to trim their growth target for this year to 6 percent to 7 percent, from 7 percent
to 8 percent At a separate media briefing on Friday, Pernia said the revised list could
even reach 100 projects as they replaced big ones with many smaller but “game-changing
projects” like roads, bridges and irrigation systems that will benefit provinces not included
in the original list. Not all of the projects in the revised list, which will be released next
week, will be finished during President Rodrigo Duterte’s term, but “half of the 100 will be
either completed or started, that is for sure,” Pernia said. The government has planned to
finance the projects through its budget, official development assistance, private sector
funds and loans.

Habito said the DPWH budget has been increased six times since 2010, but the number
of its personnel had been reduced due to streamlining. The DOTr “needs some shaping
up,” he said without elaborating. “The real imperative right now is to try to go back to the
PPP [public-private partnership] mode to that extent that we can. If we really want ‘Build,
Build, Build’ to move forward as expeditiously as we like, we really have to have a good
mix of PPP and government implemented projects,” he said. The Duterte administration
opted to undertake a hybrid form of PPP by making government roll out the projects and
then bid out contracts to the private sector for the operation and maintenance of the
completed public structures. It tried to skirt the slow process of the PPP model pursued
by the administration of former President Benigno Aquino III that implemented 10 projects
in six years.
RANK/NAME: PSSg Julie Ann J Valladolid

COURSE: IBC PNCO 2019-17

TEAM: 4

I. TITLE OF THE ARTICLE

Gov’t agencies urged: Spend, spend, spend

Source- Philippine Daily Inquirer (October 27, 2019)

Reporter- Leila B. Salaverria

II. SUMMARY

Sen. Sonny Angara on Saturday urged all government agencies to use the last two
months of the year to spend their remaining allocations to spur economic growth.
Infrastructure spending has reached 92 percent of the full-year target as of September,
while total disbursements have hit 98 percent of the target. In the second quarter of the
year, economic growth slowed to 5.5 percent because of the delay in the enactment of
the 2019 budget. According to former Socioeconomic Planning Secretary Cielito Habito.
Briefing three Pampanga business groups on Thursday, Habito said government
agencies “continue to have low absorptive capacity,” particularly the Department of
Public Works and Highways (DPWH) and Department of Transportation (DOTr), which
were below 30 percent as reflected in Commission on Audit reports. At a separate media
briefing on Friday, Pernia said the revised list could even reach 100 projects as they
replaced big ones with many smaller but “game-changing projects” like roads, bridges
and irrigation systems that will benefit provinces not included in the original list. Not all of
the projects in the revised list, which will be released next week, will be finished during
President Rodrigo Duterte’s term, but “half of the 100 will be either completed or started,
that is for sure,” Pernia said. Habito said “The real imperative right now is to try to go back
to the PPP [public-private partnership] mode to that extent that we can. If we really want
‘Build, Build, Build’ to move forward as expeditiously as we like, we really have to have a
good mix of PPP and government implemented projects.

III. ANALYSIS

Spending the money without program and planning is a complete waste of money and
prone to corruption. You would see local and national government official’s spending
money to whatever comes into their minds because of Commissions. Like roads being
re-done even if the roads are still fine, in the event will cause also traffic during the holiday
season and even everyday going to work. Blaming others of the delayed budget and slow
economy will not do well to the government and corruption is still the issue in this situation
public will question on how and why the budget will spend.

IV. RECOMMENDATION

The budget in a good quality not quantity materials, using best asphalt, cement to
pave damaged main road. Focus on the plan of the government, trimming and revised
can slow the process of the projects. Building Schools, Hospital Rehabilitation and others
in the projects should also prioritize by the government.