The Department of Budget and Management unveiled on Tuesday a proposal to update the 20-year-old procurement law to help speed up government spending and bolster economic activity.
Budget Secretary Amenah Pangandaman told a news briefing that the proposal should address agencies’ underspending, which undermined growth in the second quarter this year. She said that of programmed funds in the first six months this year, the various agencies failed to spend P170.5 billion worth of funds during the period.
Gross domestic product expansion slowed to 4.3 percent year-on-year in the second quarter and was down 0.9 percent from the first quarter when the economy grew 6.4 percent from the previous year. The slow growth in the second quarter puts in jeopardy the government’s target of an economic expansion of at least 6 percent this year.
“Based on our data, if only we were able to at least disburse P65 billion…our GDP growth (in the second quarter) would have been 5.3 percent,” said Pangandaman.
Given this, the budget chief said a circular was issued for government agencies can draw up a catch up plans to hasten budgetary spending.
She said among the recommendations presented to address the underspending is the updating of the Government Procurement Law passed in 2003.
As much as a quarter of the government’s annual budget is spent in compliance with the government procurement law.
She said the changes envisioned by government is the establishment of an electronic market place where government departments and agencies shop for their requirements, including good and services.
Pangandaman said “green procurement” and better planning and budgeting will also be included in the proposed amendments.
