The House of Representatives will resume budget deliberations after suspending them over a disagreement with the Department of Budget and Management on its cash-based system, which gives agencies only the fiscal year and the next three months to spend their funds and implement their projects.
House Majority Leader and Camarines Sur Rep. Rolando Andaya Jr. said the impasse was ended after both sides agreed to a compromise that would retain the use of the previous obligation-based system on certain projects, depending on their requirements.
Andaya said lines of communication were opened when Speaker Gloria Macapagal Arroyo met with President Rodrigo Duterte Tuesday night regarding the proposed national budget.
He said this prompted House leaders to resume budget deliberations during the two-week congressional break.
“The President opened the lines of communication on how the budget for 2019 will come out at the House of Representatives,” said Andaya, who attended the meeting at the Palace.
He said a hybrid budgeting system would combine the cash-based system with the obligation-based system, depending on the requirements of individual projects.
He said he would suggest the resumption of budget hearings to the chairman of the committee on appropriations, Davao City Rep. Karlo Nograles.
“The President’s instructions were clear—during the break we will resume the hearings,” he said.
“Likewise, it is a gesture of cooperation to the DBM and the Senate. After all, we know a compromise has been reached,” Andaya added in a mix of English and Filipino.
The House appropriations committee had earlier suspended deliberations on the P3.757 trillion national budget for 2019 amid opposition from lawmakers to the new cash-based budgeting system adopted by DBM.
Under the proposed cash-based 2019 national budget, all payouts are valid within the fiscal year and three months the following year.
DBM said the cash-based budgeting would limit incurring the obligation and disbursing payments for goods delivered and services rendered, inspected and accepted to the fiscal year.
This is in contrast to the obligation-based budgeting where agencies can spread appropriations across two years or more to enable the completion of long-term budgets.
This has had the effect of lowering the 2019 budget, which is P10 billion lower than the P3.8 trillion for 2018.
Andaya said the House leaders agreed that budgetary cuts would be restored and that they would allow the validity of some payments to one year plus six months of the following year.
He said the President told the lawmakers “to do what is good for the country.”
“I leave it to you [members of Congress] to decide. Do what you feel is right. I’m not going to get involved in that,” he quoted the President as telling them.
In a separate press conference, House Minority Leader and Quezon Rep. Danilo Suarez and Deputy Minority Leader and Buhay Party-list Rep. Lito Atienza hit Budget Secretary Benjamin Diokno for his “poor appreciation” of the cash-based budgeting system, which they said would not work in reality.
“Cash-based budgeting system is only ideal to developed nations,” Suarez said. “That is right in academic discussions, but politcally wrong.”
Suarez said that under the 2019 national budget, the Department of Health suffered a P35-billion cut; the Department of Education, P77 billion and the Department of Public Works and Highways, P95 billion.
The Department of Social Welfare and Development and Commission on Elections also got budget reductions at P5 billion, Atienza added, saying that these cuts on social services are not correct after the government implemented the Tax Reform Acceleration and Inclusion Act.
The leftist Makabayan bloc, meanwhile, called for a total revision of the budget.
Party-list Representatives Antonio Tino of ACT Teachers and Emmi de Jesus of Gabriela said next year’s budget should contain huge funding for basic social services.
Tinio said their group opposed the spending plan because of the budget cuts.
“We call for an overhaul of the budget submitted by the Malacañang, and our position is we will fight for increases in the budget for social services, education, health, housing, and for salary increases,” he said.
Senator Panfilo Lacson on Wednesday taunted some congressmen, who he said opposed the budget cuts because of they would lose their pork barrel allocations for their infrastructure projects. “2019 National Budget standoff: Some congressmen are protesting the budget cuts for ‘their infra projects’ aka PDAF,” he said on his Twitter account.
“They need massive detox and full rehab so they can lick the more dangerous addiction for money. Tokhang may be good after all,” he added, referring to the government’s bloody war on drugs.
Priority Development Assistance Fund, commonly known as pork barrel, was declared illegal by the Supreme Court in 2013.
Lacson said those who were “holding hostage” the 2019 budget were doing so because the projects in their districts would suffer.
“What projects are they talking about? Didn’t the SC already declare the PDAF unconstitutional in November 2013?” Lacson said.
Senate President Vicente Sotto III said that the Senate has agreed to support the DBM’s cash-based appropriation for 2019.
“The entire Senate, in caucus, has agreed to support the President’s budget. Yes, we are supporting the DBM’s budget proposal,” he said.
The Senate leader also said the budget hearings will resume soon based on the National Expenditure Program, because the general appropriations bill must emanate from the House.
Senator Loren Legarda said that the committee on finance, which she chairs, will not only scrutinize the proposed P3.757 trillion budget, but also review the performance of agencies, especially those with infrastructure programs that have registered low obligation or disbursement rates throughout the years.
“The proposed 2019 national budget is now cash-based as a way to ensure efficient spending of public funds and implementation of projects. But as we look into the 2019 budget of agencies, we will also exercise strong oversight and review how the 2018 budget was spent and implemented,” Legarda said.
Legarda on Tuesday said the Senate supports the government’s move to shift from obligation-based to annual cash-based appropriations starting with the 2019 national budget.
“The Senate supports a cash-based budgeting system that will help discipline the bureaucracy, addressing the problem of underspending, which has long plagued the government,” Legarda said.
“With a cash-based budget system, projects will be done sooner, thus, people would also feel the benefits of government services sooner,” Legarda said.