By Mario Casayuran, August 7 2018; Manila Bulletin


Image Credit to Manila Bulletin

Sen. Loren Legarda, chairwoman of the Senate finance committee, expressed Tuesday hopes that the shift from obligation-based to annual cash-based appropriations starting with the proposed 2019 P3.357 trillion General Appropriations Act (GAA or national budget) would result in improved delivery of basic services to the people and address underspending.

“We only want to ensure that goods and services reach the people, especially those who are most in need,’’ Legarda said.

‘’But for years, underspending has plagued the government. Agencies cite several reasons like failure of bidding, unreleased funds, and low absorptive capacity, among others. We hope that this cash-based budget would indeed address underspending,” she pointed out.

The Department of Budget and Management (DBM) stated that underspending in 2014 and 2015 was at 13 percent in both years, with combined amount of P631 billion.

Although government spending improved in 2016 when underspending rate was reduced to 4 percent and in 2017 at 3 percent, Legarda said these still translate to billions of unspent funds—P96.3 billion for 2016 and P85.2 billion for 2017.

The Development Budget Coordination Committee (DBCC) briefed senators at the Senate building on the proposed 2019 national budget.

The government’s finance and economic managers- Department of Budget and Management (DBM) Secretary Benjamin Diokno, together with Department of Finance (DOF) Secretary Carlos Dominguez, National Economic and Development Authority (NEDA) Secretary Ernesto Pernia, and Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla – presented the highlights of the country’s first cash-based budget.

Diokno explained that shifting to annual cash-based appropriations aims to minimize and gradually eliminate underspending, which actually means the inability of agencies to translate funds to beneficial public goods and services.

An annual cash-based budget system means that agencies do not only obligate or award contracts for programs, activities and projects, but also ensure actual and full delivery of goods and services within the fiscal year.

“Every year, we tell agencies to examine their budget proposals vis-à-vis their absorptive capacity and to submit a more realistic budget. With the implementation of an annual cash-based budget for 2019, we expect that agencies would now present only programs that they can fully implement within the one-year time frame,” Legarda said.

“As we review the proposed 2019 national budget, our aim is to further help government efficiently spend public funds and deliver basic services to the Filipino people,” she added.