2019News

Budget’s fate hangs on review by Palace

By Bernadette D. Nicolas, Butch Fernandez and Jovee Marie N. dela Cruz, March 27 2019; Business Mirror

https://businessmirror.com.ph/2019/03/27/budgets-fate-hangs-on-review-by-palace/

Image Credit to CNN Philippines

PRESIDENT Duterte will review the enrolled 2019 budget bill and sign if it is constitutional, Malacañang Palace vowed on Tuesday, following a move by senators to withdraw their reservations in order to reach bicameral accord on a final version of the pending P3.7-trillion 2019 national budget. This basically makes signing of the budget law a judgment call by the President.

Presidential Spokesman and Chief Presidential Legal Counsel Salvador S. Panelo said the President will still have to evaluate whether or not the Senate’s position on the post-ratification changes on the budget bill are valid.

“The Senate says it’s illegal, unconstitutional. And the President says he will not sign anything that is unconstitutional. As far as he is concerned, he will have to evaluate whether or not the opinion of the Senate is indeed correct. It depends, the President is a lawyer,” Panelo told reporters.

Asked if the President is not being put in an awkward position by leave it to him to decide on the budget issue, Panelo said: “No, their [lawmakers’] job is to pass the bill, the President’s budget. If they have done that, the ball is now in the hands of the President. They just performed their duty.”

Senate paves breakthrough

In a last-minute change of mind, Senate leaders agreed Tuesday to withdraw their reservations that had left both chambers of Congress deadlocked the past two weeks, paving the way for Duterte to sign the money measure into law and enable the government to stop operating on last year’s reenacted budget.

After a one-day meeting between some members of the House and the Senate, Senate President Vicente Sotto III signed with “strong reservations” the 2019 GAA citing “unconstitutional realignments.”

In a letter transmitting the budget to the Palace, Senate President Sotto informed Pres.Duterte he affixed his signature “with strong reservations” adding that he was leaving it up to Malacanang to “consider disapproving the unconstitutional realignments, pursuant to his constitutional power to veto” particular items” in the budget bill.

Sotto informed the President he found “unconstitutional” the P75billion worth of projects under Local Infrastructure Program of DPWH fundsd through “internal realignments” after the bicameral conference committee report was ratified.”

Sotto said the senators instead opted to leave it up to Duterte to line-veto items in the budget found by senators to be objectionable, including “last-minute realignments” made by the House after the budget bill as approved by the bicameral conference committee was already ratified by both chambers.

“The bottomline is that we signed the enrolled bill (to be submitted to President Duterte) but asserting that this is what we ratified,” Sotto said.

Senate Majority Leader Juan Miguel Zubiri pointed out that “there is no problem with 98 percent of the budget against only 2 percent that President Duterte can veto.”

For his part, Senate Minority Leader Frank Drilon cited the compromise as “proof that [while we belong to different camps] we agreed on public interest to break the budget deadlock.”

“What we have done is we maintained our position that insertions are unconstitutional but not to disregard the entire budget,” he said, adding that as far as the “thick insertions after the budget was ratified, we maintain the view that the insertion is unconstitutional and we need to point it out.”

The senators noted that at least P75-billion internal realignments were made “after the budget was ratified,” suggesting that Duterte should consider vetoing these provisions.

With the concurrence of the Senate leadership, Sotto said the Senate is now “sending the bill as is” to Malacanang for signing into law.

Silence from House

The leadership of the House of Representatives chose silence following the signing “with strong reservations” of the proposed General Appropriations Act (GAA) by the Senate.

The three-man team of House Appropriations panel chairman Rolando Andaya Jr.,  Albay Rep. Edcel Lagman and San Juan Rep. Ronaldo Zamora, who met their Senate counterparts, refused to comment as of press of time.

Earlier, Andaya reiterated that the budget itemization implemented by the lower chamber was within the parameters of  the Bicameral Committee Report ratified by each chamber.

He said the House only itemized the lump-sum fund and did not change what was agreed upon in the bicameral conference committee.

Palace review

Panelo, meanwhile, said the Palace review will not take long. “Knowing the President, he will act on it immediately because we need a new budget,” he said.

The Department of Budget and Management (DBM) also released a circular letter on the release of funds for the second quarter of 2019.

“Pending enactment of the General Appropriations Act for FY 2019, all operating units, i.e., agencies of the national government receiving allotment/notice of cash allocation directly from DBM, are authorized to obligate the amount corresponding to their actual requirements under the regular budget for the second quarter of FY 2010 but not to exceed the following percentages,” read the circular letter No. 2019-07 dated March 26 signed by DBM Officer-In-Charge Janet B. Abuel.

Among those classified under “Chargeable Against Agency-Specific Budget” were 25 percent each for Personnel Services (PS), Maintenance and Other Operating Expenses (MOOE), Capital Outlays (CO), and capitalized wages and salaries.

Twenty-five percent of the PS level using salary requirements as of end-2018 are authorized to be obligated but not to exceed the level provided under the 2019 National Expenditure Program (NEP).

This PS level excludes built-in funds in the agency for the creation of positions, inclusive of the required government premiums in Philippine Health Insurance Corporation and Employees Insurance Premiums, midyear bonus and clothing and uniform allowance.

As for MOOE, CO, and capitalized wages and salaries, 25 percent of regular programs and ongoing foreign-assisted and locally funded projects under the 2018 GAA and the 2019 NEP, whichever has the lower amount, are allowed.

Under those classified under “Chargeable against Automatic Appropriation” aree Retirement and Life Insurance Premiums, equivalent to 12 percent of the salaries component of this item as well as the corresponding RLIP to the fourth tranche compensation adjustments pursuant to Executive Order No. 201, s. 2016, as amended by EO No. 76 s. 2019, and National Budget Circular No. 573 s. 2018.

Meanwhile, the DBM will issue a Special Allotment Release Order (Saro) for items which are not covered by obligational authority, such as:

  • Budgetary Support to Government-Owned and Controlled Corporations which are fully depended on national government assistance or are heavily subsidized, Internal Revenue Allotment of provinces, citiies, municipalities, and barangays, requirements of the fourth tranche compensation adjustments, inclusive of required government premiums in PhilHealth, and ECIP.
  • Centrally managed items of department agencies/chargeable against Regular Budget FY 2018 GAA as reenacted
  • Charges against the Pension and Gratuity Fund, as reenacted, for the actual requirements for retired government employees and actual requirements for pension benefits of military and uniformed personnel; the amount of releases shall be based on the number of pensioners and rates as of December 31, 2018.
  • Charges against other Special Purpose Funds such as Budgetary Support to Government Corporations (BSGC), Miscellaneous Personnel Benefits Funds (MPBF), Contingent Fund (CF), among others;
  • Chargeable against Automatic Appropriations such as Special Accounts in the General Fund of Agencies.
  • All Saros to be issued chargeable against the FY 2018 Budget as outlined in the said circular shall be valid for obligation while the 2019 GAA is not yet in effect.

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