By Justine Irish D. Tabile, Senior Reporter
Government agencies recorded a budget utilization rate of 42.2% in January, down from 78% a 12 months earlier, the Department of Budget and Management (DBM) said.
In a Notice of Money Allocations (NCAs) Utilization report, the Budget department said agencies used a complete of P136.29 billion in the course of the month out of the P322.67 billion value of NCAs released during that period.
Unused NCAs amounted to P186.38 billion, as of the tip of January.
NCAs are quarterly disbursement authorities issued by the DBM to agencies, allowing them to withdraw funds from the Bureau of the Treasury for his or her spending needs.
In January, line departments used P132.87 billion, or 62.7% of their allotments, while P79.17 billion remained unused.
The Commission on Elections posted the very best utilization rate of 97.6% at the tip of January.
This was followed by the Commission on Audit (95.1%), Department of Foreign Affairs (90.9%), Department of Tourism (89.5%), and the Department of National Defense (78.7%).
The Department of Labor and Employment posted the bottom utilization rate of 20.2% at the tip of January.
The opposite departments with the bottom utilization rates were the Office of the Ombudsman (31.6%), the Judiciary (31.9%), the Office of the Vice-President (34.8%), and the Department of Information and Communications Technology (38.3%).
Budgetary support to state-run firms, amounting to P3.36 billion, was fully utilized as of the tip of January.
Allocations to the local government units (LGUs) were only 0.1% utilized, while Metropolitan Manila Development Authority had a 30% utilization rate.
Budget watchdog Social Watch Philippines (SWP) attributed the low January utilization rate to the delay within the signing of the 2026 General Appropriations Act (GAA).
“Budget utilization depends upon two major aspects: the absorptive and technical capability of agencies, and the timing of allotment and money allocation releases by the DBM,” SWP Senior Budget Analyst Alce C. Quitalig said in a Viber message.
“The delay in signing the 2026 GAA likely contributed to the low NCA utilization by end-January 2026, driven mainly by 0.1% disbursement of the allocation to the LGUs, largely from their respective National Tax Allotment (NTA),” he added.
He said that an identical event occurred in 2019, where only 0.2% of the NCA releases of allocation to LGUs were disbursed in the primary month of that 12 months.
“But allocation to LGUs typically record over 90% spending in other years. The year-on-year drop is clearly as a consequence of unspent LGU money allocations,” he added.
Meanwhile, Mr. Quitalig said that the 62.7% utilization rate amongst national government agencies, which was lower than the 70% seen in January 2025 is consistent with the four-year average of 63% and the historical low utilization trend of just above 60% since 2016.
“End-January figures must be viewed in context, nonetheless, as agencies are still establishing spending systems early within the 12 months. NCA utilization generally improves in succeeding months, as attested by the cumulative NCA utilization monthly flow trend,” Mr. Quitalig said.
“But departments and agencies with persistently low January performance must strengthen their spending, especially on regular programs, projects, and activities, to make sure timely delivery of public goods and services,” he added.
Nevertheless, Mr. Quitalig raised concerns whether spending improvement schemes implemented by the federal government have truly strengthened agencies’ absorptive and technical capability or have hindered their spending performance.
“Evaluating budget reforms aimed toward expediting public spending is crucial. While budget utilization is understandably modest in the primary month of the 12 months, improvements must have happened post-pandemic,” he said.
“Yet the persistently low end-January NCA utilization of the departments and agencies raises doubts in regards to the effectiveness of spending improvement schemes similar to cash-based budgeting system, GAA-as-release document and early procurement policies,” he added.
Michael L. Ricafort, chief economist at Rizal Business Banking Corp., attributed the low utilization rate to the spillover effects of presidency underspending for the reason that latter a part of 2025 as a consequence of the anomalous flood-control projects.
“There continues to be caution on government spending to forestall risk of corruption,” he said in a Viber message, but noted that the national budget that was signed on January 5 was already based on higher governance standards in comparison with previous years.
“Going forward, the federal government spending is anticipated to catch up, especially on infrastructure to make up for the underspending within the second half of 2025, but, more importantly, based on anti-corruption measures and higher governance standards,” he added.
Nevertheless, John Paolo R. Rivera, senior research fellow on the Philippine Institute for Development Studies, said that a low utilization rate in January isn’t unusual.
“It could be attributed to several aspects similar to post-holiday normalization, weaker latest orders, input and price pressures, and external uncertainty,” he said in a Viber message.
“At 42.2%, utilization isn’t alarming … it’s a standard slowdown,” he added.