Gov’t tightens belt amid virus crisis

By Beatrice M. Laforga, Reporter

THE Department of Budget and Management (DBM) will no longer release 35% of the budget of state agencies this year, ordering them to suspend non-essential activities such as mass celebrations, sports activities and travels to free up funds for the government’s response to the coronavirus disease 2019 (COVID-19) pandemic.

Budget Secretary Wendel E. Avisado issued National Budget Circular No. 580 on Wednesday stating that 35% of identified funding under the 2020 budget will no longer be released starting April 1 for all state departments, agencies, state universities and colleges, government-owned and -controlled corporations (GOCCs) and other state offices.

The DBM said considering the “duration and scale” of the pandemic, the government needs “adequate and readily available” funds to respond to the health crisis on top of the emergency powers granted to President Rodrigo R. Duterte to realign funds under the Republic Act. No. 11469 or the “Bayanihan to Heal as One Act.”

“To partially generate the required amounts to implement the national policy to address the COVID-19 situation, while observing the overall expenditure program for FY 2020, government instrumentalities concerned are advised that thirty five percent (35%) of programmed appropriations under the FY 2020 GAA shall no longer be made available for release effective April 1, 2020,” the circular, a copy of which was published in a newspaper on Thursday, read.

The department said the budget for new programs, projects, activities unlikely to be implemented this year, including those increases introduced by the Congress, will likewise not be released.

The Budget department added that 10% of total released allotments for maintenance and other operating expenses (MOOE) and capital outlays (CO) will “no longer be available for obligation.”

NO NEW VEHICLES
To implement this, the DBM ordered the agencies to defer plans of buying any kind of vehicles except ambulances and those needed by the military and other personnel responding to public safety, construction, repairs and renovations of government buildings that can be delayed.

Agencies were also asked to postpone foreign travels except for those with no cost to the government, local travels unless urgently necessary, celebrations, cultural and sports activities.

No new workers can also be hired under job orders, except for frontliners.

The DBM also ordered state agencies to cut by at least 10% the cost of services of consultants and technical assistants, consumption of fuel and utilities such as water and electricity, use of supplies and materials, except for those that are vital and needed for COVID-19 response, training and seminars, as well as other MOOE items.

The Budget department also directed state offices to review budget items in the unreleased appropriations under the 2019 General Appropriations Act (GAA) considered as continuing appropriations and items identified as “for later release.”

This will help the government pinpoint programs, activities or projects (PAPs) that can be suspended so it can redirect the funds for COVID-19 expenses.

“It is understood that PAPs offered for discontinuance will not adversely affect agency performance in FY 2020 semestral reviews to be conducted by the DBM,” it said.

In a mobile phone message, Mr. Avisado said an estimate for funds to be freed up can only be identified once agencies submit their reports by the end of the month.

In identifying PAPs that will receive 10% budget cut for MOOE and CO, the DBM said the agencies will have to identify and compute the unobligated 2019 and 2020 allotments for MOOE and CO as of end-March and submit a certification to the Budget department by April 30.

“Failure to submit the required certification under item 4.5 hereof by the public officer concerned shall be a ground for non-release of subsequent allotment requests until such certification is submitted, without prejudice to the sanctions provided under other provisions of existing laws,” the circular stated.

The DBM said it will submit to Mr. Duterte a report on the PAPs with unobligated allotments that can be suspended and redirect the funds to programs responding to the COVID-19 pandemic.

Moreover, the Budget department also “strongly urged” other offices with fiscal autonomy, including government’s legislative and judicial branches and the constitutional commissions, “to adopt and implement the herein prescribed economy measures in their respective offices.”

The circular is effective during the three-month validity of RA No. 11469, which was signed in March.

Meanwhile, Finance Secretary Carlos G. Dominguez III said spending on infrastructure projects will not be among the PAPs that will be reviewed for possible budget cut or discontinuation.

The government has a P4.1-trillion spending plan this year, with P2.846 trillion allotted for state departments and special purpose funds and P1.253 trillion considered as automatic appropriations. Continuing appropriations from the 2019 budget are at P86.539 billion.