The Ministry of Finance acknowledges delays in all its objectives of the National Development Plan

Before the Congress of the Republic and in a preview of the discussion of the General Budget of the Nation that is being prepared for 2025, the Ministry of Finance presented a new accounting of its fiscal situation and prospects, as well as the progress it has made so far in the objectives it proposed in the National Development Plan, highlighting several delays on this last point.

In the responses given to the questionnaire raised by the First Commission of the House of Representatives, this portfolio addressed aspects such as the money it lacks to comply with the allocations proposed for next year, the cost that service provision contracts have had for the State during the last two years and the status of budget execution for 2024, as well as the austerity plan it has been working on, among others.

For reading: Diesel price adjustment will be $6,000: this is how the increases will be applied

Lack of money

According to the letter, signed by the Vice Minister of Finance, Diego Guevara, the Government recognizes that the Treasury sector needs $62.836 million to meet the needs outlined in the Annual Operational Investment Plan (POAI). These resources would be part of the $24 billion shortfall. which the Higher Council for Fiscal Policy warned about for the entire budget for next year.

“The resources for operating expenses assigned to budget section 13 01 Ministry of Finance and Public Credit in the 2025 Budget Project, correspond to $27,138,682 million, will be sufficient as long as all the resources for the transfers ‘Other personnel expenses – Distribution prior to DGPPN concept’ and ‘Other transfers – Distribution prior to DGPPN concept’ are incorporated,” states the Ministry’s response.

On the other hand, he adds that “as regards investment expenses, The resources assigned to budget section 13 01 Ministry of Finance and Public Credit, correspond to $3,611,996 million, which are insufficient, presenting a deficit of $62,836 million, of which $62,228 million correspond to the MHCP considering the needs of the 2025 Annual Operational Investment Plan.”

According to Vice Minister Guevara, these deficiencies significantly affect the execution of the main functions assigned to the Ministry of Finance, such as optimizing the management and governance model of the business portfolio, optimizing the capabilities of SIIF Nación, financial and fiscal monitoring and evaluation of the General Social Security System, and improving and integrating public financial management information.

You may be interested in: “Empleo Hay” is the AmCham Colombia program that placed 10,193 young people

Delays in the National Development Plan

Another of the points consulted by the First Commission of the House of Representatives to this portfolio, was the progress achieved in its different objectives of the National Development Plan, a point in which it is recognized that There are significant delays, in some cases exceeding 240 days, according to the reported information.

To better understand this point, the six objectives of the PND that correspond to the Ministry of Finance measure the special assets delivered for the strengthening of popular economies, the new contributors covered in the social security system, and the percentage of entities with coverage of pension liabilities.

Ricardo Bonilla, Minister of Finance and Public Credit

House of Representatives

It also establishes a primary balance of the non-financial public sector. (SPNF) which is measured as a percentage of GDP. There is also the collection of territorial tax and non-tax revenues as a percentage of GDP, and net collection as a percentage of GDP. All six report arrears according to the accounts reported to Congress.

The most worrying indicator is the one related to pension liabilities, which measures the percentage of Territorial Entities that have this concept covered, understood as all pension obligations of the entities. The Minhacienda reports on this matter say that its periodicity is annual and “it has a delay of 240 days”, almost double the delay of the others, whose delay ranges between 90 and 120 days.

The cost of providing services

In order to delve into the allegations of alleged waste in public spending by the National Government and the increase in operating expenses for 2025, Congress also consulted the Ministry of Finance about the tax burden that service provision contracts constitute for the nation’s coffers.

Regarding 2023, the information provided to the legislature establishes that through the liquidation annex of Decree 2590 of December 23, 2022, $49.9 billion were allocated for the 2023 period to budget section 1301-01 of the Ministry of Finance (current transfers) for this concept, of which less than 1% went to the portfolio headed by Ricardo Bonilla.

More information: Growth expectations for Colombia in 2024 rise despite challenges

“For its part, by Decree 2295 of December 29, 20232, modified by decree 0312 of 20243, $47,157,883,951,645.00 was allocated for the 2024 period to budget section 1301-01 Ministry of Finance and Public Credit – General Management Unit, regarding which and according to the records kept in the Integrated Financial Information System – SIIF Nación, The percentage and amount allocated for payment of professional services and management support contracts by type of expense was established,” the communication adds.

Colombian pesos

iStock

In another section, they maintain that “in relation to the service provision contracts of the entities of the Treasury and Public Credit Sector, the majority are executed through item A 02 Acquisition of Goods and Services, and these commitments constitute 0.07% of the operating resources in force in 2023 and 2024. Regarding investment, the contracts are signed for the different projects and on average constitute 0.73% of the resources in force for this concept.”

For the Ministry of Finance, although there are current challenges in the outlook that must be reviewed with caution, the Government is making good progress in the development of its fiscal obligations, as well as in the planning of the execution of resources for next year. However, these data will be reviewed by the House of Representatives, to determine whether they are consistent with the country’s economic reality.