THE DEPARTMENT of Budget and Management (DBM) will only prioritize new “implementation-ready” infrastructure projects and social services programs for funding under the 2019 national budget, amid limited fiscal space.
The National Budget Memorandum No. 130 dated April 13 outlined the budget priorities framework for the preparation of agency budget proposals under Tier 2 or new and expanded projects.
The total disbursement program for 2019 is set at P3.78 trillion, 12.2% higher than the P3.37 trillion this year. Excluding the P313.3 billion set aside for obligations made in previous years, this would translate to a cash-based appropriations of P3.468 trillion.
Out of the P3.468-trillion cash-based budget ceiling, about half or P1.85 trillion will be earmarked for Tier 1 or ongoing projects, while P1.26 trillion will be allocated for automatic appropriations and special purpose funds.
“This leaves a fiscal space of P362.3 billion for expanded and new projects under Tier 2, which will account for 10.4% of the total cash-based budget ceiling,” the DBM said.
Under the memorandum, the DBM said the Tier 2 budget proposals of the departments and agencies should focus on the government’s priorities of infrastructure development and social spending.
The DBM said implementing agencies should ensure their infrastructure programs are considered in the 2017-2022 Public Investment Program; approved 2019-2021 Three-Year Rolling Infrastructure Program; and for projects at least P2.5 billion, approved by the Investment Coordination Committee.
To prevent implementation delays, the DBM said the agencies should already conduct feasibility studies, detailed engineering and planning for early procurement, among others, for the projects.
“Only shovel-ready projects for implementation shall be considered in the 2019 National Budget in order to maximize the limited fiscal space,” the DBM said.
The budget department also noted infrastructure project proposals should also be climate change and disaster risk resilient, promote convergence programs, and improve farm-to-market and local roads.
Proposals for social service projects, meanwhile, should provide support to senior high school graduates, ensure financial sustainability of education programs, intensify provision for quality nutrition, implement the Tax Reform Cash Transfer Project, and create a consolidated registry for indigenous people and persons with disabilities.
The DBM will also take into account the Tier 2 proposals’ implementation readiness, agency’s absorptive capacity, consistency with the government’s priorities, and its indicative annual procurement plan.
At the same time, the DBM cited several “funding pressures” that will compete for a share of the fiscal space, such as the P12-billion Tax Reform Cash Transfer Project as the P200 monthly transfers to beneficiaries would be raised to P300; the P33.9-billion payments for military pension following the lifting of pension indexation next year; and the P60.1 billion transfer of coco levy funds to farmers upon ratification of the Coconut Farmers and Industry Development Act.
“With these funding pressures, the expenditure directions and considerations for Tier 2 proposals… become even more crucial to ensure that the fiscal space is allocated strategically only to priority and implementation-ready programs and projects,” the department said.
The DBM will shift next year to a cash-based budgeting system wherein allocations can be spent only during the fiscal year, with an extension period of three months to settle payments for goods and services delivered and accepted within that year. — Elijah Joseph C. Tubayan

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