PNoy admin to accelerate H2 spending

The government is poised to catch up on spending in the second half of the year, an official of the Department of Budget and Management (DBM) said on Tuesday. "We're accelerating spending so [the deficit] should not go down [below] P260 billion," said DBM Secretary Florencio Abad at the sidelines of a Senate budget hearing. Government will keep its deficit ceiling pegged at P300 billion for the year, or 3.2 percent of the total economic output, despite the financial uncertainties in the United States, Abad said. Government must register a P283 billion deficit in the second half of the year, significantly higher than the P17.231-billion deficit recorded in the first semester, to meet its deficit target. In June, the deficit reached only P7.691 billion. Revenue collections in the first half, meanwhile, totaled P681.64 billion as total expenditures peaked at P698.87 billion, according to Finance Department data. Aside from its effects on the budget deficit, the administration's underspending has been criticized for contributing to the sluggish growth the economy registered earlier this year. In an earlier report, ING analyst Joey Cuyegkeng said the country lost 1.8 percent in growth because of government underspending. The slow 4.9-percent economic growth in terms of the gross domestic product was also largely attributed to lower public sector expenditures in the first three months of the In May, the DBM released some P1 trillion in allocations to counter the impact of underspending on the economy. By June, the DBM reported higher spending by government agencies reaching P402.8 billion as of end-May. It was still 8.7 percent lower than the P441.3-billion negotiated checks registered a year earlier. On Tuesday, Senator Franklin Drilon raised concern over government's underspending. "Public consumption in the budget contracted by 37% as compared to last year. This is really something that must be looked at carefully especially given the recession in the US," Drilon said after the briefing of the inter-agency Development Budget Coordination Committee. Drilon said he understands that government is implementing measures to counter the improper use of government funds, which put a damper on the government's spending capabilities. "I do hope that with these reforms being already in place that [in] the next 6 months we'll see a substantial spending on the part of the government," Drilon said. "[This is to] at least cushion whatever negative impacts there are on the economy as a result of the downgrading of the credit rating of the US, which is a major export market for us," he added. — JMT/VS, GMA News