Issue of January 5, 2020
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Gov’t spending up in Oct 2019
by DBM release

National government disbursements rose by 1.4 percent in October 2019 on the back of higher current operating expenditures on personal services (PS), subsidies to government-owned and -controlled corporations (GOCCs), and transfers to local government units, data from the Department of Budget and Management showed.

Government spending reached P310.8 billion in October, up by P4.2B from P306.6B in October 2018. 

PS expenditures grew by 6.9 percent to P83.4B in October 2019 from P78B in 2018, largely due to the fourth tranche implementation of the salary increase for civilian personnel, the second year of implementation of the base pay increase of military and uniformed personnel (MUP), and higher pension requirements of MUP due to the pension indexation to the current MUP base pay. 

Meanwhile, subsidies to GOCCs increased to P7.2B in October last year from P1.6B in 2018, corresponding to a 366.7 percent increase.

This growth was spurred by large releases to the PhilHealth for payments of the health premiums of indigent patients under the National Health Insurance Program and to the National Food Authority for the implementation of the Rice Buffer Stocking Program. 

Transfers to LGUs also buoyed the growth in government spending this October. Allotment to LGUs under current operating expenditures grew by 12.3 percent, from P35B in October 2018 to P39.3B last year.

Likewise, capital transfers to LGUs grew by 49.5 percent, from P9.8B to P14.6B.

The growth in transfers to LGUs was fueled by higher Internal Revenue Allotment shares of LGUs and increased releases from the Local Government Support Fund for various infrastructure projects of LGUs. 

The growth in government spending for the month was tempered by lower infrastructure and other capital outlays (CO) and maintenance and other operating expenses (MOOE).

In October 2019, the national government spent P82.2B in infrastructure and other CO, less by P12.2B or 12.9 percent year-on-year, mainly from the base effects of the 83.4 percent growth recorded in the previous year and the accumulation of some P12.7B outstanding checks in the Department of Public Works and Highways.

The amount, once encashed by suppliers and contractors, would increase infrastructure disbursements in the remaining months.

Spending for MOOE was also lower by P3.2B or 4.9 percent from the 2018 level of 64.5B as payouts of cash grants to beneficiaries of the Conditional Cash Transfer Program were delayed to November as a result of the election ban. 

The DBM remains optimistic that national government spending will continue to surge as line agencies complete their programs and projects and settle their payables before the end of the fiscal year.

Initial Treasury data show that notice of cash allocation disbursements for November 2019 grew by 25 percent, outpacing the 20.5 percent increase registered in November 2018.

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