Cash utilization hits 98% in 2023

THE cash utilization rate posted by government agencies was 98% at the end of 2023, the Department of Budget and Management (DBM) said.

The DBM reported that the National Government, local governments and state-owned firms used 98% or P4.34 trillion of the P4.45 trillion in the notices of cash allocation (NCAs) issued to them.

The 2023 performance matched the 98% utilization rate posted in 2022.

The remaining unused NCAs totaled P107.9 billion at the end of December.

Line departments used 97% of their allotments, equivalent to P3.24 trillion of the P3.34 trillion NCAs issued.

Last year, the departments of Interior and Local Government and Public Works and Highways, the Office of the Ombudsman, Commission on Elections, Commission on Human Rights, and the Judicial branch used 100% of their NCAs.

Meanwhile, the Department of Migrant Workers posted the lowest utilization rate of 39%.

Budgetary support to government-owned companies was 99% used, while the corresponding rate for local government units was 100% utilized.

NCAs are a quarterly disbursement authority that the DBM issues to agencies, allowing them to withdraw funds from the Bureau of the Treasury to support their spending needs.

The DBM earlier reported a budget release rate of 97.6% at the end of November. This was equivalent to P5.406 trillion out of the P5.537-trillion adjusted spending plan this year, leaving P131.25 billion in remaining funds.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said it is crucial for the government to ensure the expedited utilization of the budget this year.

“Further boosting the budget utilization of government agencies especially for 2024, learning from the lessons from government underspending earlier in 2023, would further help boost government spending especially on infrastructure and will contribute more to economic growth and development that is more sustainable and inclusive,” he said in a Viber message.

In December, President Ferdinand R. Marcos, Jr. signed the P5.768-trillion national budget for 2024.

John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., noted that the budget must be spent on “productive expenditure items that will create multiplier effects for the economy.”

“We want to see improved budget utilization on productive spending that brings about returns to the economy,” he said in a Viber message.

The Philippine Statistics Authority reported that government spending contracted 1.8% in the fourth quarter. Full-year spending was little changed at 0.4%.

Government spending had contracted 7.1% in the second quarter, which dragged on growth and prompted the Finance and Budget departments to order agencies to implement catch-up plans to improve budget usage. — Luisa Maria Jacinta C. Jocson