CPBRD: Address mismatch between agencies’ performance, finances

The plenary hall of the House of Representatives. (INQUIRER.net file photo)

MANILA, Philippines — A government arm on policy research has called for the addressing of mismatches in government agencies’ physical and financial performance, as some departments exceed performance targets but are not excelling in terms of budget utilization.

In a report released on Monday, the House of Representatives’ Congressional Policy and Budget Research Department (CPBRD) said that a mismatch between the physical and financial performance of departments was pointed out by the Development Budget Coordination Committee (DBCC) as early as 2023, but continues to be a concern.

According to CPBRD, Congress should “advocate and promote better budgeting” through a “greater scrutiny of the performance indicators.”

“A major concern identified in the DBCC’s Annual Fiscal Reports is the mismatch between the physical and financial performance of Departments (DBCC, 2023). Some Departments continue to exceed their performance targets even with persisting concerns on anemic budget utilization,” CPBRD said.

“Congress can advocate and promote better budgeting for results in the budget authorization process through greater scrutiny of the performance indicators and targets of government agencies, especially relative to their proposed budget allocations. It can also engage government agencies in more substantive discussions on the quality of performance indicators and targets contained in the annual NEP and the GAA (General Appropriation Act),” it added.

CPBRD also listed several suggestions to ensure that the national budget is aligned with the “goals of fiscal discipline, allocative efficiency and operational efficiency”, like the greater use of performance reports as a guide in appropriations, and making sure that budget prioritization is based on effectiveness and not political considerations.

Furthermore, CPBRD issued the following recommendations:

– Prioritize spending that enhances greater productivity and expenditures that catalyze market and private-led economic growth, such as investments in education, health, social transfers, and infrastructure development – Rationalize higher government spending cognizant of the absorptive capacities of NGAs (national government agencies), the huge undisbursed appropriations, and the limited fiscal space for productive spending – Leverage budgetary support to LGUs (local government units) given their increasing NTAs (national tax allotment), and at the same time, encourage them, especially high income LGUs to spend more on social and economic services – Improve budget utilization efficiency by prioritizing shovel-ready projects, implementing debt-funded projects without delays, and addressing structural gaps in project implementation – Further mainstream Program Convergence Budgeting to consolidate fragmented and overlapping initiatives of NGAs towards achieving common socioeconomic goals of the PDP (Philippine Development Plan)

CPBRD said these after observing that while the average budget utilization rate of some key agencies like the Department of Education were high, there are some programs wherein obligation rates and disbursement rates were low.

Obligation rates (OR) are the portions of funds allocated for specific projects that have been obligated to an agency, while disbursement rates (DR) are the payments made by the government to a contractor for the project.

While the DepEd registered a high overall OR, CPBRD noted that DepEd had low ORs for certain programs since 2022, like the computerization program (23 percent to 50 percent) and feeding programs (65 to 81 percent).

A bigger concern though, CPBRD said, is the “inability of government agencies to convert committed or obligated spending into actual production or delivery of public goods and services”, like DepEd’s textbook delivery program which registered a DR of 11 percent in 2023 and 17 percent in 2024.

“Even more concerning are the PAPs (priority programs, activities, and projects) with DRs lower than 50%, such as the delivery of textbooks and other learning materials (11% to 17% in 2023 and 2024), and school-based feeding (48% in 2024),” CPBRD said.

“Value for money, which is the main concern of operational efficiency, is undermined when some government agencies are not efficient in utilizing the budget given to them,” the research body added.

This is not the first time that DepEd has been called out for low budget utilization.

During the budget deliberations in 2024, for the then-proposed 2025 national budget, lawmakers called out DepEd for its failure to deliver laptops in 2023 — resulting in a low utilization of its budget.

DepEd is currently headed by Secretary Sonny Angara, but from June 2022 to June 2024, Vice President Sara Duterte was concurrent DepEd chief.

READ: Solons blast low budget use, non-delivery of laptops of DepEd under Sara 

Aside from DepEd, the table from CPBRD also showed that while the Department of Health (DOH) registered relatively high ORs and DRs for the Medical Assistance to Indigent and FinanciallyIncapacitated Patients (MAIP), the disbursement rate for the Health Facilities Enhancement Program (HFEP) was low.

Some of the programs under the Department of Information and Communications Technology (DICT) also suffered from low disbursement rates.

For 2023, DICT’s National Government Data Center had a 6.7 percent DR; National Broadband Plan with 9.8 percent; National Government Portal at 21.2 percent, and Free Internet Wi-Fi at 24.2 percent. /gsg