DBM lays out initiatives to address gov’t underspending
MANILA – The Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman laid out the ongoing key initiatives aimed at addressing the underspending of government agencies, such as prioritizing shovel-ready projects, maximizing early procurement activities, adopting digitalization, and conducting capacity-building programs.
Secretary Pangandaman emphasized that these crucial measures will help lessen the risk of underspending among government agencies by enabling the timely implementation of various projects and programs.
She made the statement at the continuation of the Development Budget Coordination Committee’s (DBCC) briefing for the Senate Committee on Finance on the FY 2025 National Expenditure Program (NEP) on 14 August.
Prioritizing shovel-ready projects
As early as the start of the year, from issuing the annual Budget Call, which details the guidelines for the formulation and submission of budget proposals of agencies, Sec. Mina reiterated that the national budget shall only prioritize shovel-ready or implementation-ready programs.
The budget secretary has consistently reminded government agencies to practice fiscal discipline and manage resources efficiently given the government's limited fiscal space.
To do this, Pangandaman also underscored the need to institutionalize the Cash Budgeting System (CBS). This public financial management reform aims to address delays caused by piling of contracts, underspending, and challenges on the implementation capacity of agencies.
"First, I would just like to note that the budget for every year in the General Appropriations Act, valid po 'yan for two years. That's why we're also pushing for cash-based budgeting. What we want po sana is whatever budget we proposed for a certain year is ma-implement po at maubos po, ma-obligate within the year," she said.
New Government Procurement Act
Pangandaman likewise highlighted the passage of the New Government Procurement Act (NGPA) as a crucial step to address underspending, as it institutionalized the conduct of early procurement activities. The new law permits government agencies to implement their projects as early as the start of the year.
"Second, early procurement activities - it's already in the New Government Procurement Act. We want all agencies to do this para po masimulan na ang mga proyekto by January 1," she pointed out.
The secretary earlier explained that the early procurement method means that once the DBM submits the National Expenditure Program to Congress, government agencies can already bid out their projects.
"Iyong passage po ng New Government Procurement Act, it will really help po because it will make procurement in the government sector po more efficient and faster," she added.
She likewise emphasized that as early as January 1, the DBM has already released the budget to agencies, including their first quarter cash request, so they can start implementing their projects and disburse their funds correspondingly.
Digital transformation
During the DBCC briefing, Pangandaman also highlighted digitalization as another crucial step to address underspending.
"And then there are other initiatives, such as the use of digitalization in our public financial management. We are still working on the IFMIS (Integrated Financial Management Information System) and Budget Treasury Management System (BTMS) that's undergoing procurement now. So, once we have that, all transactions at a given day, it's in the website. With that, makikita po natin, in real time, 'yung mga gastos, disbursement at tska mga kailangang bilhin, for proper planning," she explained.
Signed by President Ferdinand R. Marcos Jr. on 01 June 2023, Executive Order (EO) No. 29 directed the full adoption of the IFMIS in government agencies to further improve bureaucratic efficiency. IFMIS is an information and communications technology (ICT) solution that aims to simplify and improve all public financial management processes and related information systems in the country.
Meanwhile, the BTMS, a core component of IFMIS, is a centralized database that covers all government financial operations, from purchase to payment, and real-time transaction monitoring.
Public Financial Management Competency Program
"And lastly, we conduct regular capacity building to our departments and agencies, especially 'yung mga planning officers. We do that regularly, not just po in the national government, but we do that in the local government units," Pangandaman shared.
To promote efficient and sound fiscal management in the country, the DBM regularly conducts the Public Financial Management Competency Program (PFMCP) for local budget officers and PFM practitioners nationwide.
The program covers training on budgeting, internal audit, and procurement, among others, for the continuous capacity development and upskilling of PFM practitioners. (DBM/PIA-Caraga)
