2018News

House rejects cash-based funding, stalling 2019 budget

By Camille Aguinaldo, August 9 2018; Business World

http://www.bworldonline.com/house-rejects-cash-based-funding-stalling-2019-budget/

Image Credit to Philippine Star (As cited on Business World)

THE House of Representatives is planning to recall the budget reform bill for review amid fears that a shift to a cash-based budgeting system will reduce government funding overall, appropriations committee chair and Davao City Rep. Karlo Alexei B. Nograles said.

The recall also introduces an element of uncertainty to the ongoing deliberations for the 2019 budget, which will be the first to adopt a cash-based system.

“After the caucus yesterday, the members of the House of Representatives agreed to sign a resolution seeking the recall of the budget reform bill we approved,” Mr. Nograles told reporters.

He added that support for the resolution crossed party lines, with the majority, minority and independent blocs of the chamber signing off on the resolution.

The budget reform bill introduces a shift in budgeting from a two-year obligation-based budget to an annual cash-based budget. It requires appropriations to be utilized within the year.

The House version of the bill passed on third and final reading in March. The Senate version was read to the plenary in March by Senator Loren B. Legarda, who chairs the Senate committee on finance. It was identified as a priority bill by the Legislative Executive Development Advisory Council (LEDAC).

The 2019 national budget was set at P3.757 trillion, slightly lower than the P3.767 trillion programmed for this year.

Mr. Nograles said the proposal to withdraw the bill means the chamber also in effect opposes the cash-based 2019 proposed national budget.

He said the chamber had second thoughts about the cash-based budgeting system because the “use it or lose it” funding arrangements may end up reducing funding for government projects and agencies.

“Members of the House are concerned because even at the committee level until the plenary level, it was not explained well that this will be the implication of the bill. We understood that it was a good concept because the implementation and turnover of projects will be fast-tracked,” he said.

“It was never discussed and finalized that the effect of the budget reform bill would be slash, slash, slash, which is opposite to Build, Build, Build,” he added.

He added that a cash-based system for 2019 may be illegal due to the lack of an enabling law.

He said the House of Representatives may amend the general provisions of the National Expenditure Program and revert to an obligation-based system. Mr. Nograles plans to meet with the Department of Budget and Management to discuss funding levels for government agencies.

“We’ll throw the problem back to the DBM… So now, the House is saying we don’t want the cash-based budgeting. We want it obligation-based,” he said.

Ms. Legarda and Budget Secretary Benjamin E. Diokno had not responded to requests for comment at deadline time. — Camille Aguinaldo

 

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