Aquino economists quizzed over unspent P1.12T, slow spending

So much money, so little time.

President Benigno Aquino III ’s economic managers on Tuesday came under fire from senators over the administration’s apparently slow public spending, which has translated to P1.12 trillion in undisbursed funds from the national budget.

Even Sen. Franklin Drilon, chair of the chamber’s finance committee and an ardent supporter of the President, sounded the alarm, saying “the government would have to do more spending, particularly in infrastructure, given the expected downturn in the US economy, which will affect our exports.”

“So we must be able to generate domestic economic activity through public spending on infrastructure in particular, so that we can generate jobs,” Drilon told reporters after the budget hearing.

The administration, for instance, has yet to spend the P12.5-billion fund for its public-private partnership (PPP) program this year, Senate President Juan Ponce Enrile noted.

Yet, the Palace is requesting another P22 billion in PPP projects for next year, an amount which could bring the total allocation to P34 billion if the current fund remained untouched, according to Budget Secretary Florencio Abad.

“Apparently, the PPP, the much-vaunted flagship projects, have practically not taken off the ground,” Drilon said. “The senators expressed pessimism as to whether or not these PPP projects can be executed in the manner that (they were) conceived.”

Useless asset

Sen. Edgardo Angara said he could not explain or justify why the administration was hoarding so much public money.

“In public finance, money unspent is a useless asset when there’s so many urgent, necessary infrastructure and public works projects crying out for execution and implementation,” Angara said at the hearing.

The administration’s apparently slow action in infrastructure projects is evident in the Department of Education (DepEd), which still has a “backlog” of around 65,000 classrooms.

Unspent budget

Abad acknowledged that the DepEd had yet to spend P10.3 billion in this year’s budget for school buildings.

He said the backlog was originally more than 93,000 classrooms, but the government was building 30,000 classrooms.

Angara called for an “innovative way” to speed up the construction of new classrooms.

Drilon suggested that the unspent DepEd budget for classrooms be put in a financial institution as “the guarantee of private contractors undertaking the massive school-building program.”

Abad said slow public spending could be attributed partly to “lump sums needed to be aggregated, which took about the latter part of the last semester.”

“Now that they have been disaggregated, I’m very sure, Mr. Chairman, that the level of obligation and disbursement will increase dramatically over the next six months,” he told senators.

Difficult task

Within the next six months, the economic managers said the government will spend P1.12 trillion, a move Drilon described as “a very difficult task.”

Of the amount, Drilon said P613 billion would be mandatory expenditures in the form of salaries and other items.

The remaining P399 billion would cover “nonmandatory items” such as infrastructure, capital outlay, and maintenance and other operating expenses.