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Amid shortened budget cycle, DepEd hastens to use remaining funds

The one-year deadline has left government agencies rushing to utilize their entire budget.

Dec 10, 2017

Arianne Christian Tapao


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Education Secretary Leonor Briones says the shortening of the budget cycle was a “shock therapy.”

With three weeks left before the year ends, the Department of Education (DepEd) is scrambling to use its remaining budget – an estimated P158 billion or more than a quarter of its P543.2-billion allocation – to meet the deadline set by the government that wants to see an efficient disbursement of funds within a fiscal year.

President Rodrigo Duterte, in signing the 2017 national budget, vetoed a provision that extended the budget cycle period to two years. All agencies, in effect, must make sure funds are used within one year. As of Nov. 15, the DepEd budget utilization rate was at 71 percent.

Meant to stop the deep-rooted practice of underspending and guarantee that “public services are given to the people the soonest possible time,” the one-year deadline has ultimately left government agencies rushing to utilize their entire budget before year’s end.

“(The budget) will just lapse,” said Undersecretary Annalyn Sevilla, head of DepEd’s finance and performance monitoring in an interview with VERA Files.

It was “shock therapy,” Education Secretary Leonor Briones said, noting that shortening the validity of appropriations has forced DepEd to change mindset and overhaul its planning, procurement and program implementation cycles.

“As you all know, our classes start in June, and therefore we’re just gearing up and building up or strengthening our activities at the time the budget hearings are conducted,” she explained in a speech Dec. 5 at the 2017 Philippine Education Summit in Manila.

While Sevilla agrees that the government should apply a one-year rule, she says “there should be a transition.”

“We’re doing our best. In fact, we already have schedules for contract awarding,” she said.

The DepEd is hoping to utilize “90 to 95 percent” of the budget before the year ends, Sevilla said, similar to what it had achieved last year. Per the latest Commission on Audit (COA) report, the department had a 90 percent utilization rate in 2016, leaving about P43 billion or 10 percent of the P410.4 billion budget unused.

This balance included the P5-billion excess that lapsed from the 2015 budget, which was automatically reverted to the DepEd’s general fund, according to COA.

Undersecretary Annalyn Sevilla says the Department of Education’s budget utilization rate fares at 71 percent as of Nov. 15.

The department’s underspending has affected the delivery of basic education services. According to the COA report, the DepEd suffered setbacks in the delivery of learning materials for use in schools, “mostly caused by failed bidding thus extending procurement process and affected the agency’s commitment to meet its targets.”

The delay resulted in an underspending of P128 million, or 89 percent of the P144.74 million set aside for learning materials, which the DepEd failed to provide students nationwide in school year 2016 to 2017, according to COA.

Underspending has been a huge government problem for years. In a joint circular issued June 30, the Department of Budget and Management (DBM), National Economic and Development Authority and Department of Finance said the main culprit for underspending was the pervasive “organizational weaknesses” among institutions, which hampered their ability to execute programs well and spend fast.

DBM also began to roll out reforms to be implemented in 2018, like the Program Expenditure Classification that groups agencies’ projects under appropriate programs to better manage finances, produce better results and make budget understandable, it said.

Budget Secretary Benjamin Diokno is pushing for the budget reform bill, which seeks, among others, to institutionalize the shortening of the validity of appropriations from two years to one year to promote the disciplined execution of the budget.

It has been common practice to allow budgetary appropriations till the next fiscal year, but this has led to a slow utilization of the budget, Diokno said.

For 2018, DepEd has requested P585.2 billion. The House of Representatives recently approved P612.12 billion; the Senate, P549.5 billion. The two chambers have yet to finalize the agency’s 2018 budget.

Briones also envisions a “fully firm” budget utilization next year, noting the agency has started to recover from its declining budget utilization rate from 2013 to 2015.

“Fixing our fiscal, and by that I mean financial matters is one thing, but making education spending count is another matter,” she said.

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