THE Philippine Institute for Development Studies (PIDS) said weak oversight and outdated regulations prevented the government from fully deploying available revenue, leaving more than P813 billion in idle funds in 2024.
PIDS, in a statement on Tuesday, was citing the findings of the Congressional Policy and Budget Research Department (CPBRD).
Anthony Arvin V. Salazar, a CPBRD Research Department supervising legislative staff officer, said the practice of earmarking — designating funds for a particular use — is intended to protect priority programs, but in practice, locks funds into accounts that agencies are unable to use fully.
“Without strict oversight and performance measures, that money can sit idle or be inappropriately diverted, preventing the organization from meeting its core objective,” he said.
PIDS also noted that as revenue grows, spending remained low, noting that earmarked revenue rose to P200.9 billion in 2021 from P56.4 billion in 2013, with a sharp increase in 2024 following the inclusion of the National Tax Allotment (NTA), funds released to local governments representing their share of National Government revenue.
“The average annual utilization rate from 2014 to 2024 is only 24.3%, or just 13.6% accounting for the effects of the national tax allotment,” he said. “This low utilization has resulted in a steady increase in cumulative year-end balances, reaching P813 billion by 2024.”
Mr. Salazar urged the government to strengthen monitoring and evaluation systems, citing the need for performance metrics to assess whether earmarked revenue is being spent efficiently and effectively.
He cited the Tobacco Fund, which has served in recent years “to augment the National Tobacco Administration’s operational requirements. As a result, the fund’s cumulative balance has remained idle for many years,” he said.
Mr. Salazar also called for the passage of the Budget Modernization Bill, which addresses the persistent underutilization of earmarked revenue. — Aubrey Rose A. Inosante