By NEDA, August 1 2018
Image Credit to National Economic and Development Authority
The shift to annual cash-based budgeting will hasten the delivery and completion of government programs and projects, including the government’s infrastructure push, that will largely benefit the Filipino people, the National Economic and Development Authority said.
Speaking at the economic managers’ briefing on the proposed PhP3.757 trillion 2019 National Budget at the House of Representatives on Tuesday, Socioeconomic Planning Secretary Ernesto M. Pernia underscored the importance of the new budget system in the government’s massive infrastructure program dubbed as “Build, Build, Build.”
“In cash-based budgeting, cash needs to be expended in a year’s time with a grace period of three months at most. This will not adversely affect the government’s infrastructure program. In fact, projects will be implemented faster because implementing agencies are now under pressure to make sure projects are delivered in a year’s time,” Pernia said.
The Development Budget Coordination Committee (DBCC) composed of Secretary Pernia, Budget Secretary Benjamin E. Diokno, Finance Secretary Carlos G. Dominguez, and Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. presented the country’s macroeconomic performance, government’s revenue generation efforts, and the proposed 2019 budget to the House Committee on Appropriations and answered queries from several lawmakers.
This year’s national budget still follows the obligations-based budgeting system, with appropriations amounting to PhP3.767 trillion.
However, as part of the Department of Budget and Management’s (DBM) transition to a cash-based budgeting system, agencies were requested to implement the 2018 budget as if it were cash-based.
Pernia backed Diokno’s statement that the 2019 cash-based budget is actually 13 percent or PhP433 billion higher than the estimated cash-based equivalent of this year budget at PhP3.324 trillion.
“This is an important point to emphasize. There is no budget slash,” Pernia said. “The budget of the implementing agency depends on the projects that are ready for implementation within the year,” he said.
Pernia added the shift from multi-year obligations-based to annual cash-based budgeting in the fiscal year 2019 fosters discipline among implementing agencies and encouragesprudent and efficient use of limited resources.
Reducing the validity of appropriations to one year from two years, the change in the budgeting system is a major part of the Budget Reform Bill being pushed by the DBM withthe Department of Finance, Bureau of the Treasury, NEDA, and Commission on Audit.
This is also part of the legislative agenda in the Philippine Development Plan 2017-2022, the country’s blueprint for development.