Tuesday, November 23, 2021

DOTr reaffirms its commitment to sustain swift budget disbursement in aid of economic recovery

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The Department of Transportation (DOTr), under the leadership of DOTr Secretary Art Tugade, reaffirms its commitment to sustain swift budget disbursement following the approval of the Senate Plenary on the agency's budget for 2022.The Senate Committee on Public Services led by Sen. Grace Poe presented its counter budget for the DOTr during the deliberations on 22 November 2021.

“While the proposed budget for next year is lower than what the DOTr has outlined in previous presentations and coordinations, we nevertheless commit to the fullfilllment of its mandate in the remaining term of office with whatever approved budget will be made available,” DOTr Undersecretary for Finance Giovanni Lopez said.

On the matter of faster budget disbursement, the DOTr is most proud to inform the Senate that the DOTr is one of five (5) line agencies that had been cited by the Department of Budget and Management (DBM) for accelerated budget utilization in the first nine months of 2021.

The said DBM report published widely notes: "To cover the cash requirements of agencies' programs, operations and projects, the DBM issues NCAs to government-servicing institutions such as the Development Bank of the Philippines, Land Bank of the Philippines and Philippine Veterans Bank. NCAs are valid until the end of the quarter in which they were issued.”

“It said that a higher NCA utilization rate reflects line agencies' ability to release funds and deliver programs and projects on schedule.”

“Five agencies that used their entire allocation for the period were Department of Transportation with P45.88 billion; the Judiciary with P31.41 billion; Civil Service Commission with P1.28 billion; Commission on Audit with P9.20 billion; and Office of the Ombudsman with P3.09 billion.”

In 2015, the disbursement rate was at 47.86% (over allotment). In 2016, the DOTr had 60.77% but it dropped again in 2017 (38.57%) as most projects were still for bidding at that time. In 2018, it had 40.38%. This was the year when the agency started with the "no advance payment" policy.

To note, the DOTr is the only direct line department that was cited by the DBM in its report. This is an acknowledgement of how fast and efficient the DOTr has been utilizing its budget, especially given the conditions imposed by the COVID-19 pandemic.

In 2019, the DOTr's disbursement rose to 74.5% but it dropped to 64.57% in 2020 due to the COVID-19 pandemic. As of September 2021, the agency's disbursement rate was already at 63.15%.

Meanwhile, the DOTr's perceived low disbursement rate is largely attributable to the following:

1. The disbursements reflected in the Financial Accountability Report (FAR) No. 1 do not include loan proceeds disbursements which get booked-up/recorded only upon issuance by DBM of the Non-Cash Availment Authority. To date, the DOTr is 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.

2. As a measure to ensure that no payment is released for infrastructure projects contracts without corresponding accomplishments, DOTr; in 2018, has instituted the no "advance payment" policy, particularly, for locally-funded projects. Hence, contractors get to be paid only once they have achieved at least 20% physical accomplishment.

3. There were also delays in the release of the DBM of the Notice of Cash Allocation (NCA) for all GOP 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. Proof of the DOTr's efficient utilization of available NCAs is the recent report published by the DBM which recognized the DOTr as one of the top performers in terms of NCA utilization. According to the DBM report, the DOTr has a 100% rate of NCA utilized vis-a-vis the amount of NCA released.

"We wish to express our gratitude to the Senate Committee on Public Services led by Sen. Grace Poe for the approval of the 2022 budget of the DOTr and its attached agencies. As with the challenge to disburse the budget faster, we will be more than pleased to coordinate with the office of Senator Poe and provide all the details on the DOTr's accelerated use of its 2021 budget. Rest assured that we will be consistent in performing swift disbursement of the agency's budget as what we have committed and performed in the previous years," Usec. Giovanni Lopez said.

The DOTr will also consider the added inputs that the good senator may provide, all in the spirit of mutual cooperation.

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