By Bernadette D. Nicolas, August 28 2019; Business Mirror

Image Credit to Business World

THE Department of Budget and Management (DBM) is now eyeing the full implementation of cash-based budgeting system by 2022 as it currently is on a wait-and-see mode on the government’s performance during the transition period in relation to adjusting to the cash-based budgeting system.

During the budget briefing by the Development Budget Coordination Committee, DBM Acting Secretary Wendel E. Avisado said the proposed P4.1 trillion 2020 national budget was actually a “mixed” of obligation-based and cash-based budgeting systems.

DBM officials also added that what prompted the decision on when the cash-based budgeting will be fully implemented was not the reservation of some agencies on the cash-based budgeting system but the impact of the delay in the passage of the 2019 budget, as well as the election ban.

“It is not actually the reservation of agencies. It is a DBM-initiated decision because, as mentioned earlier, on the delay of the passage of the 2019 budget, as well as the election ban,” DBM Undersecretary for Legal Affairs Janet B. Abuel said. “So we realized that we have lost six months. So if you are going to strictly impose the three month Extended Payment Period only, which will give the agencies implementation up to December 31, 2019, and deliver and payment only until March 31, 2020, that would really be difficult.”

“So under normal circumstances that would not be as difficult but given the
delay for four months in the 2019 budget enactment and we have extended the Extended Payment Period for another six months, which is actually or estimated to be the same delay owing to the delayed budget enactment, as well as the election ban.”

Moreover, Avisado also told reporters that they have yet to determine if they will also extend further the Extended Payment Period for the 2020 national budget to six months just like what they did under 2019 budget.

“We will look at the end of this year and find out what can be done precisely,” he said. “We’re in transition now but hopefully we will be able to fully implement that by 2022.”

Abuel added: “For 2019, we have 18 months so we decide on how many months will we extend for 2020. We are going to look at how we are going to fare for this year. So, one possibility is to shorten the 18 months; like decrease it by three months. We are not really sure but if we see that the agencies are still struggling, maybe we can [still try] the 18 months again. So it is still tentative until we see the result of the system by the end of the year.”

In May, Socioeconomic Planning Secretary Ernesto M. Pernia called for the temporary suspension of the cash-based budgeting system under a reenacted budget.

Pernia argued that reverting to obligations-based budgeting under a reenacted budget would allow the government to continue spending funds beyond the one-year and three-month grace period provided for in the cash-based budgeting system as he pointed out that any delay in government spending will negatively impact on
economic growth.

The DBM originally proposed that the Extended Payment Period be limited to three months after the fiscal year but this was extended further to six months to resolve the budget impasse on the 2019 budget due to the opposition of the House to the implementation of cash-based budgeting system.

The impasse was broken after the DBM and the House of Representatives agreed on a transitory cash-based system for the 2019 budget.