THE fiscal consolidation program remains on track with government revenue stronger than expected, economists said, ruling out the need for belt-tightening after the government exceeded its 2022 budget.
“I’m not particularly concerned about this level of over-spend — for now — partly because the fiscal consolidation plan is broadly on track for a deficit of around 7.5% of GDP this year, and this owes in large part to revenue rising faster than the government projected for the 2022 budget,” Pantheon Chief Emerging Asia Economist Miguel Chanco said in an e-mail.
The Department of Budget and Management (DBM) last week reported that budget releases as of the end of October hit P5.08 trillion, well over the P5.024-trillion budget for 2022.
Government overspending remains “acceptable,” he said.
“It’s impossible to know how much more the government will spend in the final months of the year, but what’s clear to me is that there isn’t much pressure on them to tighten their belts, thanks to relatively healthy public coffers,” he added.
Leonardo A. Lanzona, who teaches economics at Ateneo de Manila University, said that any overspending should be transparent.
“While these may seem improper, from an efficiency point of view, these can be acceptable. However, since it is the public who will pay for these loans, the government needs to make all of these negotiations and subsequent allocations known to the public,” he said in an e-mail.
“Accountability and transparency should be required from the public officials as these additional funds can easily attract corruption. Government would need to set up the rules and guidelines regarding these excess funds,” he added.
Meanwhile, the government announced its cash utilization rate was at 94% at the end of October, according to the DBM.
The National Government, local governments and state-owned firms used P3.36 trillion of the P3.56 trillion in Notice of Cash Allocation (NCA) issued to them in the 10-month period.
The usage rate was ahead of the year-earlier pace of at 91%.
The DBM tallied P202.91 billion in unused NCAs.
The DBM distributes NCAs on a quarterly basis, authorizing agencies to withdraw funds from the Bureau of the Treasury.
According to the DBM, line departments used 92% or P2.27 trillion of their NCAs as of the end of October, leaving P201.42 billion unused.
Only the Commission on Human Rights recorded a budget usage rate at 100%.
On the other hand, the Department of Information and Communications Technology posted the lowest rate of 67%.
Budgetary support to government-owned companies as well as allotments to local government units were 100% used in the 10-month period, out of P176.78 billion NCAs issued. — Luisa Maria Jacinta C. Jocson