By Melissa Luz T. Lopez, March 26 2019; Business World

Image Credit to Business World

THE Department of Budget and Management (DBM) released fresh guidelines on the government’s salary and maintenance funding requirements for the second quarter pending the resolution of the 2019 budget deadlock.

Circular Letter 2019-7 capped the release of agency budgets for salaries of government workers, maintenance and other operating expenses, and capital outlays at 25% of 2018 levels. This is similar to the authority given by the DBM for national government agencies during the first quarter.

The order was given “pending enactment of the General Appropriations Act (GAA)” for 2019, as signed by DBM Officer-in-Charge Janet B. Abuel.

Legislators have been deadlocked over the P3.757-trillion national budget for three months, with the Senate refusing to accept the “unconstitutional” insertions allegedly made by members of the House of Representatives after their bicameral meetings.

The DBM said disbursements for personnel services are to include payment of the mid-year bonus, clothing and uniform allowances, mandatory government contributions to the Philippine Health Insurance Corp. and the Employees Compensation Insurance plans, as well as for the creation of new positions.

For capital outlays, budget releases between April and June are to cover regular programs as well as “ongoing foreign-assisted or locally funded projects” that appear in the 2018 budget or the 2019 proposed spending plan, “whichever is lower in amount.”

The country is currently operating on a re-enacted 2018 budget, which leaves new programs and even big-ticket infrastructure projects unfunded.

The government expects to spend P3.78 trillion this year, lower than the P3.833 trillion estimate back in October.

Senate President Vicente C. Sotto III yesterday signed the budget bill “with strong reservations,” which paves the way for its transmittal to Malacañang for review and eventual signing into law.

Meanwhile, the DBM said agencies will need to request a Special Allotment Release Order for other funding needs not covered by the circular. This include subsidies for government-owned corporations, internal revenue allotment for provinces, cities, towns and barangays, and the requirements for the fourth tranche of salary increases for state workers.

President Rodrigo R. Duterte signed Executive Order No. 76 on March 15 to provide funds for a fresh salary increase for all government workers ahead of the passage of the 2019 budget.

Other expenses will need the submission of a Special Budget Request, including centrally-managed items of departments, charges against the Pension and Gratuity Fund like the payment of benefits to retirees, charges against Special Purpose Funds and against automatic appropriations.

Economic managers were forced to slash their growth targets to 6-7% this year from 7-8% previously, because it will be “very difficult” to catch up with the rollout of infrastructure projects after missing much of the dry-season window for construction.

Secretary Ernesto M. Pernia said a budget deadlock that lasts until April will bring down full-year growth to 6.1-6.3%, well under the government’s original target and likely level with the 2018 pace of 6.2%.