PGMA’s budget reforms, lower debt payments freed more funds for eco and social services

Manila (25 June) — President Gloria Macapagal Arroyo’s reforms instituted at the Department of Budget and Management, have substantially improved the national budget process and efficiency, allowing government to pour in more funds to economic and social services.

“These reforms have helped us strengthen fiscal consolidation. From 2001 to 2009, there is a downward trend in the budget deficit,” Department of Budget and Management (DBM) Undersecretary Laura Pascual in a news conference in Malacañang yesterday.

She said the reforms have made the budget strategy-based and result-oriented and improved the efficiency of budget execution.

“Allocation of budget is now focused on actual outputs. If the project is not implemented, there will be an impact in the release of funds and on the budget for the following year. So, there is more pressure on agencies to deliver,” Presidential Spokesperson Ricardo Saludo explained.

Pascual said the DBM has pushed the implementation of public expenditure management that resulted to a decrease in government disbursements, from 19.9 percent to 17.1 percent in 2008.

Pascual credited this achievement to the decline of personnel services and debt interest payments due to improved deficit control.

“With the decline in the amount allocated to debt payments, resources were allocated more and more to economic services, which includes infrastructure projects, particularly in transportation,” Pascual said.

From 2000 to 2009, budget allocation for economic services increased by 128 percent (or 14 percent a year), from 167 billion in 2000 to 382 billion in 2009.

Allocation for social services grew by 112 percent (or 12 percent a year), from 213 billion in 2000 and 452 billion in 2009.

On improving the efficiency of budget execution, Pascual said the DBM has exercised the early release of budget and faster funds utilization by agencies.

She said the government has implemented the semestral release of Notice of Cash Allocations (NCAs) which lapses monthly.

She added the DBM has also examined books and advise agencies on the proper use of funds.

“This improves fund utilization and enables agencies to save funds,” she said. (PIA-MMIO)