THE chairman of the House Committee on Appropriations on Thursday said lawmakers have decided to restore the obligation-based budget system for 2019 national budget. They are preparing a resolution recalling the budget reform bill endorsed by the Department of Budget and Management (DBM), which proposes a shift from a multiyear obligation budget to an annual cash-based budget.
In an interview, Rep. Karlo Alexei B. Nograles of Davao City, the panel chairman, said several lawmakers have expressed their opposition to the cash-based budget system championed by the DBM as it slashed budgets of key agencies under the proposed P3.757-trillion national budget for 2019.
“We are not going to support the cash-based budgeting,” Nograles said. He added the proposed 2019 budget—which is cash-based—was P10 billion lower than the current P3.767-trillion General Appropriations Act.
According to Nograles, the budget of the Department of Health was decreased by P35 billion; the Department of Education, by P77 billion; and the Department of Public Works and Highways (DPWH) by P95 billion.
There were also P5-billion reductions in the budgets of the Department of Social Welfare and Development (DSWD) and Commission on Elections (Comelec).
The proposed 2019 national budget is cash-based as opposed to the traditional, multiyear obligations-based budgeting. The DBM has described it as the more efficient budgeting method since it limits incurring obligations and disbursing payments for goods delivered and services rendered, inspected and accepted within the fiscal year.
The obligations-based budgeting, meanwhile, is common budgetary practice in the Philippines. It allows appropriations and obligations until the next fiscal year, extending the validity of funds to two years.
Budget Secretary Benjamin E. Diokno earlier stressed, however, that the proposed 2019 budget and the existing 2018 budget cannot be compared as “apples to apples” since one is cash-based while one is obligations-based.
Budget reform bill
Moreover, Nograles said the cash-based system was the whole concept of the budget reform bill that was approved by the House in March and now pending in the Senate.
With this, Nograles said a resolution is now being signed by lawmakers requesting the Senate to return House Bill 7302, or the Budget Reform Act, in order for the lower chamber to introduce further perfecting amendments.
The bill seeks to reform the budget process by enforcing greater accountability in public financial management (PFM), promoting fiscal sustainability, strengthening Congress’s power of the purse, instituting an integrated PFM system, and increasing budget transparency and participation.
There is a need for the House of Representatives to recall the enrolled copy of House Bill 7302 “in order to introduce amendments,” said the resolution authored by Majority Leader Rolando G. Andaya Jr., Nograles and Albay Rep. Joey S. Salceda.
Moreover, Nograles said members of the House of Representatives have agreed to sign a resolution seeking the recall of the approved budget reform bill.
“The implication of recalling the budget reform bill is our opposition to the cash-based budgeting for 2019. So now, what the House is saying, we don’t want cash-based budgeting; what we want is to restore [the budget system to] obligation-based,” he added.
Challenging
During the hearing of the House Committee on Appropriations, Public Works Secretary Mark A. Villar admitted that the shift to a cash-based budgeting is “challenging” for his agency.
According to Villar, the department has made several adjustments due to the cash-based budgeting system as it requires disbursements to be made within the fiscal year.
“We are adjusting to this new policy which is in contrast to the previous shift. It is the mandate of this department if they tell us to disburse in one year, we have to adjust our assumptions based on that,” Villar said.
“We have to make sure that our timelines are extremely accurate. We have to make sure preparations [for] our projects are all on time… It’s more challenging, [but] it’s not impossible. It’s a different form of budgeting and we will do our best to adjust to it,” he added.
Meanwhile, lawmakers are pushing for the restoration of budget cuts of the DPWH.
Last Wednesday Majority Leader Andaya said “there have been suggestions that we overhaul it, we return it, we tweak it, [or] we change the forecast.”
According to Andaya, the 2019 national budget submitted by the DBM may have made wrong projections on inflation. He said the 2019 budget should be adjusted considering the country’s
soaring inflation.
“The inflation target may already be inaccurate. So faced with that situation, economic managers should submit a higher budget adjusted to inflation,” Andaya said.
“This is the first time that it will happen. There’s no precedent to this. Everything is uncertain maybe a little more study before we apply it,” Andaya added.
In his 2019 budget message, President Duterte urged Congress to pass the budget reform bill to promote and implement participatory budget mechanisms in the different phases of the budget cycle to encourage citizen engagement and ensure a more responsive budget.
https://businessmirror.com.ph/house-panel-returning-2019-budget-to-dbm-decries-cuts/
In an interview, Rep. Karlo Alexei B. Nograles of Davao City, the panel chairman, said several lawmakers have expressed their opposition to the cash-based budget system championed by the DBM as it slashed budgets of key agencies under the proposed P3.757-trillion national budget for 2019.
“We are not going to support the cash-based budgeting,” Nograles said. He added the proposed 2019 budget—which is cash-based—was P10 billion lower than the current P3.767-trillion General Appropriations Act.
According to Nograles, the budget of the Department of Health was decreased by P35 billion; the Department of Education, by P77 billion; and the Department of Public Works and Highways (DPWH) by P95 billion.
There were also P5-billion reductions in the budgets of the Department of Social Welfare and Development (DSWD) and Commission on Elections (Comelec).
The proposed 2019 national budget is cash-based as opposed to the traditional, multiyear obligations-based budgeting. The DBM has described it as the more efficient budgeting method since it limits incurring obligations and disbursing payments for goods delivered and services rendered, inspected and accepted within the fiscal year.
The obligations-based budgeting, meanwhile, is common budgetary practice in the Philippines. It allows appropriations and obligations until the next fiscal year, extending the validity of funds to two years.
Budget Secretary Benjamin E. Diokno earlier stressed, however, that the proposed 2019 budget and the existing 2018 budget cannot be compared as “apples to apples” since one is cash-based while one is obligations-based.
Budget reform bill
Moreover, Nograles said the cash-based system was the whole concept of the budget reform bill that was approved by the House in March and now pending in the Senate.
With this, Nograles said a resolution is now being signed by lawmakers requesting the Senate to return House Bill 7302, or the Budget Reform Act, in order for the lower chamber to introduce further perfecting amendments.
The bill seeks to reform the budget process by enforcing greater accountability in public financial management (PFM), promoting fiscal sustainability, strengthening Congress’s power of the purse, instituting an integrated PFM system, and increasing budget transparency and participation.
There is a need for the House of Representatives to recall the enrolled copy of House Bill 7302 “in order to introduce amendments,” said the resolution authored by Majority Leader Rolando G. Andaya Jr., Nograles and Albay Rep. Joey S. Salceda.
Moreover, Nograles said members of the House of Representatives have agreed to sign a resolution seeking the recall of the approved budget reform bill.
“The implication of recalling the budget reform bill is our opposition to the cash-based budgeting for 2019. So now, what the House is saying, we don’t want cash-based budgeting; what we want is to restore [the budget system to] obligation-based,” he added.
Challenging
During the hearing of the House Committee on Appropriations, Public Works Secretary Mark A. Villar admitted that the shift to a cash-based budgeting is “challenging” for his agency.
According to Villar, the department has made several adjustments due to the cash-based budgeting system as it requires disbursements to be made within the fiscal year.
“We are adjusting to this new policy which is in contrast to the previous shift. It is the mandate of this department if they tell us to disburse in one year, we have to adjust our assumptions based on that,” Villar said.
“We have to make sure that our timelines are extremely accurate. We have to make sure preparations [for] our projects are all on time… It’s more challenging, [but] it’s not impossible. It’s a different form of budgeting and we will do our best to adjust to it,” he added.
Meanwhile, lawmakers are pushing for the restoration of budget cuts of the DPWH.
Last Wednesday Majority Leader Andaya said “there have been suggestions that we overhaul it, we return it, we tweak it, [or] we change the forecast.”
According to Andaya, the 2019 national budget submitted by the DBM may have made wrong projections on inflation. He said the 2019 budget should be adjusted considering the country’s
soaring inflation.
“The inflation target may already be inaccurate. So faced with that situation, economic managers should submit a higher budget adjusted to inflation,” Andaya said.
“This is the first time that it will happen. There’s no precedent to this. Everything is uncertain maybe a little more study before we apply it,” Andaya added.
In his 2019 budget message, President Duterte urged Congress to pass the budget reform bill to promote and implement participatory budget mechanisms in the different phases of the budget cycle to encourage citizen engagement and ensure a more responsive budget.
https://businessmirror.com.ph/house-panel-returning-2019-budget-to-dbm-decries-cuts/
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