Press Release
September 30, 2011

Use 'Pedring' to correct underspending
Unspent budget is virtual 'calamity fund'

Sen. Ralph G. Recto yesterday said government could use the devastations wrought by typhoon Pedring and the ensuing tropical storms as catalyst to correct its under spending.

"Not only croplands and properties were toppled by typhoon Pedring but also the government's alibi to slow down spending," Recto, chair of the Senate ways and means committee, said.

Recto said Malacanang could immediately access its unspent public funds in this year's budget to bankroll rehabilitation of areas affected by typhoon Pedring and by the buffet of new typhoons that is expected to hit the country before the close of 2011.

"The entire balance of the 2011 national budget is a virtual 'calamity fund' waiting to be tapped considering that infrastructure works in the coming months would surely be centered on restoring typhoon-ravaged provinces," he said.

Weather authorities have predicted that five to six more typhoons may visit the country before the close of the year.

Recto said with the damage wrought by Pedring and the five to six more typhoons expected to hit the country before Christmas, the government should accelerate efforts in releasing the unspent infrastructure funds for typhoon rehabilitation. Pedring's damage to infrastrucure and crops is estmated to reach more than P1 billion, claiming the lives of at least 54 people.

"The government is clearly having a hard time spending its funds as shown by the weak economic growth in the last two quarters. It could adopt a catch-up mode by targeting for fund release typhoon-prone areas that are directly in the path of more storms scheduled to visit the country before Christmas," he said.

He said this way, typhoon-prone provinces could now start charting their rehabilitation plans including the financing component that could be made available by the national government by drawing such from the unspent capital outlays.

Recto noted that government has barely touched its infrastructure outlays for the year, disbursing only P64.5 billion from January to July, which is 141 percent lower or P91.5 billion short of the P156 billion actually spent in the same seven-month period last year.

It was also noted that the government continues to contract spending in January to August, after having disbursed P947.244 billion for the entire bureaucracy compared to the P1.031 trillion expenditures it registered in the same eight-month period in 2010.

The January to August spending receipts do not even come close to this year's programmed expenditures of P1.275 trillion covering the first three quarters.

"If the typhoons go on a holiday this Christmas, then good. When it strikes, then the LGUs and national agencies could easily start rehabilitation effort with the already approved or obligated funding," Recto said, adding that new jobs and other economic activities generated by the infrastructure projects could help nurse back to health typhoon-ravaged provinces.

He said, for example, agriculture-related projects and programs intended for Leyte-Samar, North and South Luzon including the rest of Bicol - the usual typhoon 'doormats' -- could be funded now and implemented in earnest even before a strong typhoon strikes.

Underspending is being blamed for the anemic economic growth in the first two quarters with the gross domestic product (GDP) - the value of goods and services produced by an economy in a given period - expanding only by 4.6 percent and 3.4 percent in the first and second quarters, respectively.

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