THE DEPARTMENT of Budget and Management (DBM) said Congress has “no choice” but to work with budget proposals made by the executive branch, and cannot seek more funding, amid a dispute over the new cash-based budgeting system and how long it takes for access to allocated funds to expire.
“The constitution is very clear. It does not actually say whether budgets should be cash-based or obligation-based. But whatever budget we submit to Congress, they have to work with that. They have no choice. There is also a provision in the Constitution that they cannot increase the budget,” Budget Secretary Benjamin E. Diokno said during the Economic Journalists Association of the Philippines Economic Forum at the Ayuntamiento de Manila on Tuesday.
Congress resumed deliberations on the P3.757-trillion 2019 budget yesterday after they stalled briefly when legislators realized that the one-year expiry of budget allocations might effectively reduce their access to funding during an election year, leading some to lobby for a bigger budget to compensate for allocations that expire before they can be used.
The government is transitioning from an “obligation-based” budget system to a cash-based one, in order to accelerate government spending. Under the previous system, agencies had two years to implement funds before losing access to funding.
Mr. Diokno added that some items need not be disbursed within a fiscal year under the cash-based budget system, but they cannot be reallocated for other uses.
He cited as an example the Disaster Risk Reduction and Management Fund (DRRMF) or the calamity fund. “If no calamities happen the funds cannot be spent.”
Some of the legislators’ concerns center on budget cuts in the Health, Education, and Agriculture departments, after the government allocated funds sufficient for projects that can be procured and implemented within a year. The 2018 obligation-based budget with a two-year “use-it-or-lose-it” spending deadline was P3.767-trillion.
Budget deliberations at the House resumed after Majority Leader Rolando G. Andaya, Jr. said last week that the Legislative and the Executive branch of government arrived at a compromise “hybrid” budget that allows expenditures to exceed the one-year timetable for items such as lump-sum allocations.
The House said some challenges to spending in 2019 include the two to three-month spending ban that comes into force before elections.
Mr. Diokno held firm on the overriding objective of getting government to spend more freely to stimulate the economy. ”Cash budgeting has allowed us to correct underspending in the past. We want projects much sooner,” he added.
The DBM has also proposed the Budget Reform Bill, approved by the House of Representatives on final reading in March, to institutionalize cash-based budgeting and prevent a return to the old practice in future governments. — Elijah Joseph C. Tubayan