Banking & Finance

No reenacted Budget for 2019 despite Cuts

Date: 10 August 2018; Type: Legal News; Source: Philippine News Agency

MANILA, Aug 10 (PNA) - The chairman of the House appropriations committee on Friday assured the public that there would be no reenacted budget for next year amid lawmakers' outright opposition to the new cash-based budgeting system proposed by the Department of Budget and Management (DBM).

In a statement, committee chairman Karlo Nograles also assured that Congress would pass a budget that would reflect the development agenda of President Rodrigo Duterte and benefit the Filipino people.

"Our job in Congress is to ensure the passage of a budget that is in line with the vision of the President, a budget that benefits all Filipinos, especially those in the regions," Nograles said.

House members across the political spectrum have banded together to oppose the proposed PHP3.757-trillion cash-based budget for 2019, which contained “budget cuts” in key government agencies.

A resolution is circulating in the lower chamber seeking for the recall of the budget reform bill, which proposes a shift from a multi-year obligation budget to an annual cash-based budget.

In an annual cash-based budget, contracts intended to be implemented for the fiscal year should be fully delivered by the end of the year while the multi-year obligation-based budgeting system allows the government to enter into a contract or "obligate funds" without requiring the actual delivery of goods and services within the year.

Nograles noted that the DBM's proposed cash-based budgeting is all about "slash, slash, slash", contrary to the administration's "Build, Build, Build" thrust.

He added that the cash-based budgeting would lead to less funding for classroom buildings, health facilities, irrigation projects, roads and bridges, which usually take more than a year to complete.

In an interview on Thursday, Nograles said House members plan to revert to the obligation-based budget system.

"Now, we’re changing the premise. We’re back to obligation-based so you have no basis to these cuts, what are you going to do about it? Pag-uusapan namin ngayon (We're going to discuss now) with DBCC, where do we go from here?" he said.

During the budget briefing of the Commission on Higher Education (CHED) at the House of Representatives on Thursday, CHED Officer-in-Charge Prospero de Vera III said the proposed cash-based budget would "severely hamper" the implementation of the free college tuition law.

“We will be severely hampered in implementing RA (Republic Act) 10931 because the first semester for some universities start in June…at the earliest maybe toward the end of July," de Vera said, stressing that the fiscal year and academic year are not aligned.

During another budget briefing, Department of Public Works and Highways (DPWH) Secretary Mark Villar said while the shift to a cash-based budgeting is "challenging" as it requires disbursements to be made within the fiscal year, the department has made several adjustments for that.

"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 of 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.

Albay Rep. Edcel Lagman rallied lawmakers to support the restoration of budget of the DPWH, which was slashed by PHP93.34 billion. 

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