Benjamin Diokno to meet lawmakers on budget cuts

MANILA, Philippines — Congressmen will meet with Budget Secretary Benjamin Diokno possibly next week on budget cuts for critical agencies and on the new “cash-based” spending scheme for 2019.

“This is a proposal by the Department of Budget and Management (DBM) – shift from an obligation-based budget to a cash-based budget – which is causing some confusion among members of the House of Representatives. They’re wondering why instead of the budget going up, it’s now going down,” Majority Leader Rolando Andaya Jr. said yesterday.

Andaya, who was budget secretary during the presidency of now Speaker Gloria Macapagal-Arroyo, said under the proposed new scheme, funds have to be not only obligated but spent as well within the fiscal year starting next year.

“Under an obligation budget, you can obligate this year and pay next year. It’s as if you have a credit line (with contractors and suppliers). That’s what we have been used to,” he said.

Andaya said congressmen feel that multi-year projects that require multi-year funding would be adversely affected.

“It is also the common sentiment that appropriations for their districts were mostly decreased with the proposed cash-based budgeting,” he added.

Andaya pointed out that some congressmen “were suggesting extreme measures, like returning the budget (to Malacañang), but of course we do not want to do that.”

“This is the President’s budget proposal. What we need is stronger communication with the DBM to understand where they are coming from. We’ve also done our own consultation with the various departments. All of them seem to be at a loss on what cash-based budgeting is and how it will affect their operations next year,” he said.

Andaya hoped the confusion on the new budgeting scheme would not affect the House timetable on the consideration of the proposed P3.757-trillion 2019 national outlay.

Eastern Samar Rep. Ben Evardone said the cash-based process “is anti-development because it dampens construction of vital infrastructure nationwide.”

It would also deter agencies from going into multi-year projects like a road-and-bridge network or a rail system, he said.

Among the departments whose budgets were cut in the President’s version of the budget were public works and highways, education and health. Congressmen are proposing that the reductions be restored.

House appropriations committee chairman Davao City Rep. Karlo Nograles said he could not understand why the DBM made substantial cuts.

Nograles said public works and highways suffered a P95-billion reduction, while education and health would have to make do with allocations lower by P77 billion and P35 billion, respectively.

“It will be difficult for us to explain to our countrymen why we are reducing the amount of money we will appropriate for classrooms, barangay health centers, education, roads and bridges at a time when we have imposed new and higher taxes,” he said.

Nograles was referring to taxes imposed under the controversial Tax Reform for Acceleration and Inclusion (TRAIN) law. Due to increased levies, revenue agencies have reported higher collections.

According to Diokno, since the 2019 budget is proposed to be cash-based, agencies that have a historical record of being slow in spending funds and undertaking projects would necessarily have reduced funding.