By Charmaine A. Tadalan, April 29 2019; Business World
Image Credit to Philippine Star
CLOSER COORDINATION between government branches and among agencies, as well as clearer signals from Malacañang about its priorities will be needed to ensure that the delay in enactment that hounded this year’s national budget will not visit 2020’s P4.1-trillion spending plan, a top Budget official and economists said in separate recent interviews.
“We strongly urge all heads of departments, agencies, bureaus, offices, commissions, state universities and colleges, other instrumentalities of the National Government and all others concerned to strictly comply with the deadlines prescribed in the budget preparation calendar under the budget call,” Janet B. Abuel, officer-in-charge of the Department of Budget and Management (DBM), said in an e-mailed response to queries on Tuesday.
The DBM issued on Feb. 26 National Budget Memorandum (NBM) No. 131, or the National Budget Call for FY 2020, formally kicking off the process for next year’s spending plan. NBM 131 requires state offices to submit their proposed 2020 budgets on May 3. The DBM targets to submit the new consolidated state spending plan for approval by President Rodrigo R. Duterte and his Cabinet on June 17. Mr. Duterte will then submit the 2020 budget to lawmakers after his 4th State of the Nation Address on July 22, the day the 18th Congress opens its first regular session.
“The DBM will closely coordinate with the Office of the President and the rest of the Cabinet, and will continue to aim for the early submission of the FY 2020 National Expenditure Program to Congress in accordance with Section 22, Article VII of the 1987 Constitution,” Ms. Abuel said.
President Duterte signed on April 15 the 2019 national budget as Republic Act No. 11260, four months late, after a row between economic managers and leaders of the House of Representatives, and later on between leaders of the House and the Senate. He vetoed some P95.3 billion in appropriations that were deemed not in accordance with his administration’s priorities, slashing the total amount to P3.662 trillion.
University of Asia and the Pacific School of Law professor Natividad Cristina J. Gruet said Mr. Duterte could have been more emphatic in pressing his priorities on Congress.
“… [W]hat President Duterte could have done in hindsight really was to be more firm as regards to the kind of budget he preferred, which he did when he talked about vetoing the pork,” Ms. Gruet said in a telephone interview on Tuesday.
“But that [statement in early April that he would veto any appropriation deemed irregular] was a little too late in so many ways; it could have been done faster,” she added.
“But, honestly for me, it was clearly a power struggle in the upper and lower house and there was very little I think the President could have done at this point.”
Ms. Gruet added that Mr. Duterte could have talked more about reforms he wanted, instead of largely focusing on his anti-drug campaign.
“I think there should have been a lot more focus. President Duterte could provide more public speeches that would really set a strong signal to Congress about the priority of these reforms,” she said.
“At this point, of course, we are already familiar with how he gives his speeches. It’s still very much focus on the anti-drug campaign and very little attention to the reforms, fiscal reforms that are necessary for his ‘Build, Build, Build.”
Foundation for Economic Freedom President Calixto V. Chikiamco, said in a separate phone message, Wednesday, that the Legislative-Executive Development Advisory Council should “conduct regular meetings” to improve coordination between Malacañang and lawmakers
Sought for comment, Senate President Vicente C. Sotto III said budget legislation would have progressed better with transparency in the deliberations.
“More transparent budget deliberations and amendments and early submission of the House to the Senate will improve budget proceedings,” Mr. Sotto said in a phone message, Sunday.
For his part, Rizal Commercial Banking Corp. economist Michael L. Ricafort said even with the delay in the 2019 national budget, the 17th Congress performed well in passing fiscal reforms compared to its predecessors.
“Despite the delay in the 2019 national budget (that may otherwise signal greater prudence in terms of curbing/cracking down undue leakages), Congress has passed relatively bigger number of fiscal reform measures/legislative reform measures in recent months compared to previous years,” Mr. Ricafort said in an e-mail, Tuesday, citing laws that replaced quantitative restrictions on rice with regular tariffs in order to bring down prices of the staple, that further strengthened the central bank, and which slashed personal income tax rates but increased or added taxes on various products and services, among others.
“This sends a strong signal on the determination to pass more fiscal/legislative reform measures, especially those that structurally improve the government’s fiscal management in terms of increasing recurring tax revenues/other recurring revenue sources, as well as greater prudence in structurally curbing expenditures/leakages that may have been deemed unnecessary or inconsistent with the law/Constitution.”
For ING Bank N.V. senior economist Nicholas Antonio T. Mapa, Mr. Duterte “will likely retain control of both houses and this will be key yet again in furthering reforms and push his drive for ‘Build Build Build’ as the Philippines pushes on to attain a higher and more inclusive growth momentum.”
Nomura had said in an April 11 Global Markets Research note that Mr. Duterte will likely have enough allies in Congress to push for remaining tax reforms, citing his consistently “high” net satisfaction rating.