October 4, 2018
BREAKFAST WITH BEN: DBCC 2018 MID YEAR REPORT AND UPDATES ON PROJECT DIME
Breakfast with Ben
Breakfast with Ben is a weekly informal and casual discussion of Department of Budget and Management Secretary Benjamin Diokno with media to talk about the latest news on the budget, economic reforms and government policies.
October 3, 2018
8:30 AM – 10:30 AM
6F, Joy Nostalg, ADB Avenue, Ortigas, Pasig
1. DBM Secretary Benjamin E. Diokno
1. DBCC 2018 Mid Year Report
* Watch the full, unedited press conference below:
Project DIME, or “Digital Imaging for Monitoring and Evaluation,” started monitoring 13 big-ticket programs since the project was launched in March 2018. One such program is the P6.2 billion allocation for the 119 projects to construct/improve access roads leading to seaports and airports of the Department of Public Works and Highways (DPWH). Monitoring the progress of completion of these concrete roadways until their eventual use is crucial in the provision of ease in the movement of people between urban centers and maritime and air facilities as well as in ensuring the efficient transport of goods and materials.
As of August 30, 3018, the program has reported an 88.2 percent movement of projects equivalent to 105 projects out of 119 total projects already ongoing, including 11 seaport projects already completed. In terms of financial utilization, the program has reported some 89.6 percent obligation of allotments issued and 25.0 percent disbursement of the obligated funds.
One of the access roads to seaports is the 2-kilometer BOMEDCO Transloading Road at Medellin, Cebu, which will ease congestion leading to the Maya RoRo Port. With a cost of PhP 23 million, the project will convert the paved road to a concrete one. The construction started in March 22 of this year and as of August 30, over 95% of the road project has been completed.
Sample satellite images of this project in Region VII was provided by the Department of Science and Technology, our partner in these monitoring efforts, including the dates they were taken.
As of February 22, 2018, from gravel road
As of August 20, 2018, to concrete road
Access Roads to Airports
Project DIME is also monitoring the construction of a 5-kilometer New Ibajay – Mabini – Sandoval gravel access road to Taytay Airport in Palawan. The project, which costs PhP 65.8 million, started in February 15 of this year. As of August 30, the project has been completed.
Included below are satellite images of the project and the respective dates they were taken.
As of January 31, 2018, from dirt road
As of August 28, 2018, to gravel road
Project DIME is one of the Department of Budget and Management’s (DBM) key reforms to implement the management side of its mandate to ensure that every dime of the people’s money is spent well and to assist the implementing agencies in their provision of programs, activities, and projects. Initial steps have already been made with the use of technologies available in DOST such as the use of satellites and geo-tagging applications. This is especially necessary in far-flung areas wherein in-person physical inspection would prove difficult.
DBCC: FISCAL PERFORMANCE BETTER-THAN-EXPECTED IN 1ST HALF OF 2018
The Development Budget Coordination Committee (DBCC), chaired by the Secretary of Budget and Management, recently issued the Fiscal Year (FY) 2018 Mid-Year Report to provide updates on the performance of the Philippine economy. The report discusses the 2018 National Government Budget, the first semester macroeconomic and fiscal performance of the Philippine economy, as well as the economic outlook for the rest of the year.
The DBCC’s mid-year report highlighted reforms on the fiscal sector, particularly the Tax Reform for Acceleration and Inclusion (TRAIN) on the revenue front and the shift to cash-based budgeting on the spending side. These are vital measures that will enable the government to finance and realize its socio-economic objectives.
“Such landmark fiscal reforms have enabled the Philippine economy to register better-than-expected performance in terms of revenue collection, public spending, and the deficit,” said Budget and Management Secretary Benjamin E. Diokno. “This is backed by the numbers—revenues and disbursements are above program, while the deficit is below-target. This positive confluence of factors does not happen often, if at all,” the Budget Chief added.
From January to June 2018, actual revenue collections of the government have reached PhP1.411 trillion, higher by PhP105.7 billion or 8.1% than the PhP1.305 trillion program. This is on account of tax policy reforms under TRAIN, tax administration improvements in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), as well as higher non-tax revenues from income collected by the Bureau of Treasury (BTr) and privatization proceeds.
Meanwhile, spending in the same period has reached P1.604 trillion, up by PhP34.4 billion or 2.2% compared to the PhP1.569 trillion program. The faster utilization of funds means that the people will enjoy the benefits of government programs and projects at the soonest possible time. It means more prompt completion of public infrastructure projects, such as roads, bridges, and mass transit systems, and more efficient delivery of social services, like education, healthcare, and poverty-alleviation programs.
The improvement is credited to the early release of funds with the General Appropriations Act-As-An-Allotment-Order (GAAAO) Policy, the one-year validity of appropriations, and the transition to a cash-based budgeting system in 2019. In particular, infrastructure and other capital outlays have paced public spending with the government’s aggressive Build Build Build campaign.
Given the revenue and spending performance, the deficit registered at PhP193.0 billion in the first half of 2018. This is PhP71.3 billion or 27.0% lower than the programmed deficit in the first semester set at P264.3 billion.
In terms of the macroeconomic environment, the DBCC noted that the Philippine economy grew by 6.3% in the first half of 2018. Though it is below the government’s target of 7.0% – 8.0%, the Philippines remains to be one of the fastest-growing economies in the region.
As a testament to the increasing role of government in promoting economic growth, government consumption grew by 12.6% in the first semester of the year, higher than the 4.3% growth rate posted by government consumption in the same period last year. Under capital formation, public construction also surged by 22.1% in the first half of 2018, up from the 9.3% growth in the first half of 2017. Again, this is due to robust government spending for priority programs and projects, particularly Build Build Build.
The infrastructure projects of the Department of Public Works and Highways (road projects, flood control projects, etc.) and other capital outlay projects of the Philippine National Police (construction of police stations), Department of Education and State Universities and Colleges (repair and rehabilitation of school facilities) contributed to the rise in public construction and infrastructure spending.
The DBCC will convene on October 16, 2018 to reassess its medium-term macroeconomic assumptions and review fiscal targets in light of recent economic developments, particularly inflation, the interest rate environment, and updates on tax reform in Congress.
The 2018 Mid-Year Report of the DBCC may be accessed through the following link in the DBM webpage: https://www.dbm.gov.ph/index.
TABLE 1: National Government Revenue Performance (in billion pesos)
TABLE 2: National Government Disbursement Performance (in billion pesos)
Table 3: National Government Fiscal Position (in billion pesos)
Table 4: Growth of GDP, by Component
DIOKNO: BRITISH COMMUNITY IS ‘SUITABLE’ PH PARTNER FOR BUSINESS AND EDUCATION
On September 24, Sec. Diokno met with some top officials from HSBC UK. In the meeting, the Budget Chief highlighted the Philippine economy’s sound and robust macroeconomic fundamentals, which allow the country to poise itself as Asia’s next investment hub.
Secretary Diokno, along with NEDA Secretary Ernesto Pernia and Trade Secretary Ramon Lopez, also met with British telecom giant Vodafone to discuss the possibility of the company entering the Philippines as a third player. Vodafone officials raised concerns on the ease of doing business in the Philippines, which the cabinet secretaries were quick to address by stating that the President has signed the Ease of Doing Business Act early this year.
Afterwards, the cabinet secretaries met with Royal Dutch Shell to discuss business prospects in the Philippines.
On the same day, Sec. Diokno sat with other key officials—NEDA Secretary Ernesto Pernia, Trade Secretary Ramon Lopez, and BSP Deputy Governor Diwa Guinigundo—for a round table discussion with members of various international banks and business chambers. Bankers were particularly interested in the Duterte administration’s ambitious Build Build Build infrastructure program, and how the Philippines is responding to the various changes in the global economic environment.
The meetings and discussions were aimed at encouraging further British investment in the Philippines, as the United Kingdom remains as one of our Top 10 sources of Foreign Direct Investment. “In line with our twin goals of pushing growth to 7-8% annually and reducing poverty from 21% to just 14%, we are doing our best to attract foreign investments to help us with our economic and development agenda,” the Budget Secretary remarked.
On education and government partnerships
On September 26, Sec. Diokno and NEDA Sec. Pernia met with school administrators of the London School of Economics (LSE), and discussed possible educational partnerships with the institution. LSE, a global leading school for economics, political science, and public policy, offers executive education courses and other programs. “We are exploring the possibility of a partnership with LSE, especially with respect to their short-term programs. We believe this could help further the competencies of our civil servants,” Secretary Diokno said.
Sec. Diokno also sat with Fung Siu of the Economist Intelligence Unit (EIU) to explain the Philippines’ macroeconomic outlook, and address other issues related to the country’s economic policies. EIU is an arm of The Economist, and is a provider of country, risk, and industry reports and analyses worldwide.
Lastly on September 28, Sec. Diokno attended a briefing by the UK Government Digital Service (UK GDS) on procurement reforms and the utilization of digital platforms for government services. This is in line with the Department of Budget and Management’s (DBM) efforts to implement a more efficient procurement and public financial management systems through the use of modern platforms.
“The United Kingdom is a suitable partner for the Philippines, both in terms of business and education. We look forward to stronger economic ties with the British community,” Sec. Diokno noted.
Photo/s used in this post is/are covered under the Fair Use Exemption of the IP Code.
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