News Update DBM’s Abad admits govt won’t meet 2011 deficit goal

With only two months left in the year, the Department of Budget and Management stopped short of admitting that the Aquino administration will be unable to hit its revised deficit-spending goal of P260 billion, which economic planners had hoped would give the economy a needed boost. The budget deficit in the first 10 months of 2011 stood at only P74.251 billion — about P186 billion off target. DBM Secretary Florencio Abad said government spending is partly down because some of the programmed spending is unnecessary. He could only say that it would be a “challenge” to accelerate spending any further. "There is a huge amount of money that is not being spent because you don't need to spend them and because of good things we did in managing the funds of the government,” Abad explained. Last month, Abad could only say that there was a “need to address the institutional problems and other concerns that hamper agencies’ implementation of programs and projects and utilization of funds.” Among the problems discovered is the lump-sum nature of some of the funds. “For instance, under the 2012 budget, we have proposed to disaggregate a significant amount of lump-sum funds, which have slowed-down the contracting and disbursement process,” Abad said. From this year’s approved budget, P111.5 billion or 11.9 percent has yet to be released, while “disbursements as of October amounted to P1.195 trillion, which is equivalent to 81 percent of total allotment releases so far, and 72.6 percent of the P1.645-trillion national budget for 2011,” the DBM said. An organization of ICT resellers and shop owners in the country said the underspending of the government has slowed down the growth of the local tech sector as public funds that were supposed to be used in ICT procurement were withheld by the government. The Computer Manufacturers, Distributors and Dealers Association of the Philippines (Comddap), the country’s oldest IT retailers, said in a recent press briefing that underspending had a huge impact on the industry since the public sector is still one of the largest – if not the largest — users of ICT in the country. Wesley Ngo, a director of Comddap and a top executive of local tech distributor Astech Pengson, said it is hard to quantify the effect of the cutback but stressed that the government has a big role in spurring economic activity through public spending. The unspent money most likely included funds allocated for ICT projects, Ngo said. — With Newsbytes.ph/ELR/VS