Analysts Urge State to Fix Underspending as 2027 Budget Hearings Begin

GOVERNMENT AGENCIES should address persistent underspending and boost their capacity to implement programs before seeking bigger allocations in the 2027 national budget, analysts said. Ederson DT. Tapia, a political science professor at the University of Makati, said recurring underspending is not just a financial issue but also a governance and implementation problem because appropriated funds that remain unused could translate into delayed infrastructure projects and public services. “Money appropriated but not effectively spent can mean roads not built, classrooms not completed and services not delivered when they are needed,” Mr. Tapia told BusinessWorld via Facebook Messenger. He attributed low budget use to weak project preparation, unrealistic implementation timelines, procurement delays and limited absorptive capacity. The comments come as agencies prepare their funding requirements for the 2027 national budget before the House of Representatives, with government departments expected to justify proposed increases based on their capacity to implement programs and deliver results. Mr. Tapia said controversy surrounding flood control projects might have made government officials more hesitant to implement big infrastructure projects for fear of being associated with irregular or corruption-prone spending. “Greater caution is welcome, but we should guard against bureaucratic paralysis,” he said, adding that the government should avoid swinging from questionable spending to chronic underspending. Congress should consider agencies’ use records when reviewing budget requests, but should not automatically cut allocations of agencies with low use, Mr. Tapia said. “The more important question is why the agency is underspending,” he added. If an agency lacks the capacity to implement its programs, repeatedly providing it with substantially bigger allocations would make little sense, he said. However, cutting funds without addressing underlying constraints could also weaken service delivery. Budget scrutiny should therefore focus not only on how much an agency is requesting but also on whether it could realistically deliver the programs it wants funded, Mr. Tapia said. He called for improvements in project preparation, procurement planning and technical specifications before substantial funds are appropriated. Congress and the Department of Budget and Management should also look beyond use rates by examining the gap between appropriations, obligations, disbursements and actual physical accomplishments, he said. Hansley A. Juliano, a political science instructor at the Ateneo de Manila University, said underspending should be examined alongside the risks of poor quality or corruption-prone spending. “Underspending is usually debated along two lines,” Mr. Juliano said, referring to situations where government limits spending and projects are hampered, or where spending is rushed and corruption or budget insertions occur. Lack of planning remains part of the problem, he said, but questioned whether existing planning systems adequately account for informal practices that have become routine in some government offices. Mr. Juliano cited instances of government offices budgeting for groceries or giveaways for training participants despite these expenses being nominally unrelated to the activities, describing such practices as part of the standard operating procedure in some offices. Greater caution in spending is prudent, he said, but policymakers should distinguish between safeguards that improve oversight and measures that effectively discourage legitimate government spending. Mr. Juliano also urged government agencies to boost the recruitment and development of people trained in public administration, accounting, management and leadership, while reducing barriers that prevent qualified workers from entering government service. Information source: BusinessWorld Nation