MANILA – The Department of Budget and Management (DBM) considered the University of the Philippines (UP) system’s “absorptive capacity” in preparing the proposed National Expenditure Program (NEP) for 2023, an official said Thursday.

DBM Undersecretary Goddes Hope Libiran made this remark after Cagayan de Oro Rep. Rufus Rodriguez urged President Ferdinand “Bongbong” Marcos Jr. and DBM to restore the PHP3.3 billion that was cut from the proposed 2023 budgets of the UP System and the Philippine General Hospital (PGH).

Based on the proposed budget, Rodriguez said the UP system would suffer a funding reduction of PHP2.5 billion while the Philippine General Hospital (PGH) would lose PHP893 million.

Libiran, however, explained that the DBM takes into consideration the budget utilization rate of any government institution prior to budget allocation in the proposed NEP.

“In our review and evaluation of UP’s budget proposals, we considered its absorptive capacity, which is 66 percent as of end-2021,” she said in a press statement.

Absorptive capacity refers to an agency’s ability to utilize resources made available to them.

Libiran said the UP system’s budget in the 2022 General Appropriations Act (GAA) included infrastructure projects and hospital equipment which were non-recurring expenditures.

“The seeming decrease of PHP2.5 billion in UP’s budget in the 2023 NEP as compared to 2022 is attributable to the upward adjustments made by Congress in the 2022 GAA for various capital outlay projects for infrastructure projects and purchase of hospital equipment for the Philippine General Hospital, which are one-time or non-recurring expenditures,” she added.

She insisted that it was “wrong” to compare the 2023 NEP with the 2022 GAA.

Libiran also assured that the education sector will remain as having one of the highest budgetary budgets of this administration as mandated by the Constitution, with an 8.2 percent increase in the proposed NEP, at PHP852.8 billion.

‘Libreng Sakay’

Meanwhile, Libiran also defended the decision to exclude allocation of the Department of Transportation’s (DOTr) “Libreng Sakay” or service contracting program in the 2023 NEP, noting that it is a non-recurring or one-time expenditure item.

“It is not a regular program. Hence, similar to previous years, no funds were allocated for it under the 2023 National Expenditure Program,” she said.

She explained free rides were originally implemented by the DOTr at the onset of the pandemic to help the road transport sector badly hit by the pandemic.

“This year, it was intended to mitigate the impact of the fuel surge. We expect oil prices to stabilize next year,” she said.

She also noted that the inclusion of the SCP (service contracting program) in the FY 2022 GAA is congress-introduced.

“Hence, we will defer to the wisdom of our honorable lawmakers the decision on whether or not to allot appropriations for the said program,” she added.

She said the DBM will also defer to the direction of the Department of Finance (DOF) as to policies concerning the sustainability and continuation of programs related to financial assistance.

The executive department’s 2023 NEP is at PHP5.268-trillion 2023, which is 4.9 percent higher than this year's PHP5.024 trillion national budget. (PNA)