2018News

What did DBM, House agree on? Just a ‘transitory cash-based system’

By Bernadette D. Nicolas, August 29 2018; Business Mirror

https://businessmirror.com.ph/what-did-dbm-house-agree-on-just-a-transitory-cash-based-system/

Image Credit to Philstar.com

BUDGET Secretary Benjamin E. Diokno clarified on Wednesday that the Department of Budget and Management (DBM) and the House of Representatives agreed on a “transitory cash-based system” for the proposed 2019 budget.

House Majority Floor Leader Rolando Andaya, Jr. earlier broke the news that the DBM and the lower chamber agreed on a “hybrid budgeting”system, which meant a combination of obligation-based and cash-based systems.

This was after the lower chamber and the Executive met on Tuesday to resolve the issue on the proposed 2019 budget of P3.757 trillion.

Although Diokno stopped short of saying that what was agreed upon was a compromise, he said the transitory cash-based system means that the extended payment period is further stretched to six months, which is longer than the originally proposed three months.

Asked if there will be a problem with this scheme especially on the implementation of projects, Diokno told BusinessMirror there will be none since the payment period was just extended.

“What’s three months, anyway?” he said.

Asked if they agreed on the three-year transition period to the shift to cash-based budgeting, Diokno replied that is what is stated in the Budget Reform Bill.

As for the supplemental budget, Diokno said there was no commitment to craft one during their meeting on Tuesday.

“It is a possibility but not a certainty,” he said, noting that it will be difficult to pass a supplemental budget especially without the identification of the financing source.

Diokno said if a supplemental budget will be passed, the source of funding may come from passing all the tax packages within the year, although he noted that only the third and fourth packages of the Tax Reform for Acceleration and Inclusion will be non revenue-neutral.

As to the restoration of budget cuts of certain agencies, Diokno said it is Congress’s prerogative to realign the budget allotted for the agencies if they deemed it appropriate.

However, the DBM may still be consulted by the House on the matter. The budget impasse stemmed from the opposition of the House to the cash-based budgeting system for 2019, which they said led to somebudget cuts in certain agencies.

Among the issues cited by the House are the budget cuts in the Department of Health by P35 billion, Department of Education by P77 billion, and Department of Public Works and Highways by P95 billion.

This prompted the House to temporarily suspend budget hearings. It resume these on Tuesday (Aug. 28).

Under a cash-based budgeting system, the projects listed in the budget must be fully delivered, inspected and accepted by the end of the fiscal year.

In an obligation-based budgeting system, contracts awarded within the fiscal year can be delivered even after the end of the year. Inspection, verification and payment can also be done within and beyond the end of the fiscal year.

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