Acting Budget Secretary Kim Robert C. De Leon said government agencies can spend as much as 98% of their budgets and still fail to deliver meaningful results, rejecting the idea that high budget utilization rates equate to strong public-sector performance.

Mr. De Leon said spending must be assessed alongside actual accomplishments, rather than treating the share of the budget used as a measure of how well the government serves the public.

“I would not want to be gauged on the percentage of the budget being utilized. We’re looking at the quality of spending. You may be spending less but producing more in terms of output and even outcome,” he said.

The Department of Budget and Management (DBM), the agency that prepares the national budget and monitors how departments deploy their appropriations, regularly tracks utilization — in effect, how much of their allocated funds agencies have actually used — across the bureaucracy. Mr. De Leon said that while utilization rates remain an important indicator, the overall assessment of government agencies must also consider whether programs and projects achieve their targets and deliver the intended goods and services.

Government agencies posted a cash utilization rate of 92.7% at the end of August, against the 93.8% pace from a year earlier, the DBM reported. The reading covers eight months of the January-to-December fiscal year.

Mr. De Leon challenged agencies to look beyond full figures to examine the actual benefits delivered to the public.

“This approach calls for greater attention to the quality, efficiency, and impact of public expenditures, including whether programs and activities produce tangible improvements in public services,” he said.

The Philippines funds its annual spending program through the General Appropriations Act, which covers the January-to-December fiscal year. Utilization rates have long been cited by budget officials as an indication of how promptly agencies implement government programs. Mr. De Leon’s stance reframes that yardstick rather than discarding it: speed of spending still matters, but a high rate counts for little if programs miss their targets. Under that standard, the DBM’s regular utilization reports remain a number to watch, now read alongside whether agencies achieve their targets and deliver the intended goods and services.

— Justine Irish D. Tabile, BusinessWorld

Source: DBM rejects link between budget utilization, effective service delivery — BusinessWorld