THE Department of Transportation (DOTr) clarified on Tuesday that it has one of the better fiscal performances of line agencies this year, citing a report from the Department of Budget and Management (DBM) listing the accelerated budget utilization rates of government institutions for the first nine months of 2021.
Responding to comments from senators during a budget hearing, the transport department clarified that as of September 2021, its disbursement rate was at 63.15 percent, putting it on top of DBM’s notice of cash allocation (NCA) list.
A higher NCA utilization rate reflects line agencies’ ability to release funds and deliver programs and projects on schedule.
Only five agencies used their allocation for the first nine months of 2021. Topping the list is the DOTr with P45.88 billion, followed by the Department of Justice (DOJ) with P31.41 billion, the Civil Service Commission (CSC) with P1.28 billion, the Commission on Audit (COA) with P9.20 billion, and the Office of the Ombudsman with P3.09 billion.
“This is an acknowledgment of just how fast and efficient we have been utilizing the budget, especially given the conditions imposed by the Covid-19 pandemic,” Transportation Undersecretary for Finance Giovanni Lopez said.
In 2019, the DOTr’s disbursement settled at 74.5 percent, but it dropped to 64.57 percent in 2020 because of the pandemic.
Lopez noted that the lawmakers’ perception of its supposed low disbursement rate is “largely attributable” to financial accounting report standards.
For instance, Lopez explained, the disbursements reflected in the Financial Accountability Report No. 1 do not include loan proceeds disbursements which get booked-up or recorded only upon the issuance by the DBM of the Non-Cash Availment Authority (NCAA).
“To date, we are yet to receive our requested NCAA from DBM totalling around P75 billion which represents our loan proceeds disbursements for this year and even for prior years’ dating back to 2018,” he said.
Lopez further explained that this perceived low disbursement rate is also attributable to the “no advance payment” policy that the DOTr implemented in 2018. That policy requires the agency to only pay contractors for infrastructure projects after they have achieved at least 20-percent physical accomplishment.
“There were also delays in the release of the DBM of the NCA for all disbursements. Particularly affected by this are locally-funded projects disbursements, which, although already needed for progress billings settlement or fund transfers to our implementation partners, had to be put on hold pending receipt of their covering NCAs,” he said.
Lopez underscored that the DOTr, citing a DBM report, has “a 100 percent rate of NCA utilized vis-a-vis the amount of NCA released.”
Senators on Monday questioned the “slow” and “dismal” fiscal performance of the DOTr during a budget meeting. They also doubted the absorptive capacity of the agency for new projects due to its “low disbursement rates.”
They also approved a P120-billion proposed budget for the DOTr for next year. It is 36-percent higher than the P88 billion allocation for 2021, but significantly P1.5 billion lower than the amount proposed under the General Appropriations Bill and more than P33 billion lower than the National Expenditure Program.
“While the proposed budget for next year is lower than what we have outlined in previous presentations and coordinations, we nevertheless commit to the fullfilllment of our mandate in the remaining term of office with whatever approved budget will be made available,” Lopez said.