MANILA, Philippines — Malacañang on Thursday expressed optimism that the P3.757-trillion budget for 2019 would be passed on time after the Budget department and lawmakers agreed to implement a transitory-cash-based system.
Differences between the executive and the House of Representatives with regard to the budget system have threatened to delay the passage of next year's expenditure program.
The Budget department wants a cash-based system, wherein contracts for the fiscal year must be fully delivered, inspected and accepted within the year. Annual cash-based budgeting also allows an extended payment period of three months after the fiscal year.
Lawmakers, however, prefer an obligation-based system, wherein contracts awarded within the fiscal year can be delivered even after the end of the year. The inspection, verification, and payment for the projects can also be done within and beyond the end of the fiscal year.
Malacañang previously warned that lawmakers may not be able to fund their pet projects if the 2019 budget is not passed before the end of the year and this year's outlay is reenacted.
Budget reform advocates during the Arroyo administration had warned against reenacted budgets, saying these were prone to graft.
The impasse, however, appears to have been solved as presidential spokesman Harry Roque confirmed that the two sides have agreed to adopt a transitory cash-based system.
"Per the Department of Budget and Management, they, together with Congress, have agreed to a transitory cash-based system. Under this system, government would have 12 months to obligate and 18 months to disburse its budget," Roque said in a statement.
"Having said this, we expect the national budget to be passed on time and signed by the president before the end of the year," he added.
Roque said the DBM would be disclosing the full details of this transitory cash-based system in due time.
Under the constitution, the national budget during the previous year will be reenacted if Congress fails to approve a new expenditure program. The provision will ensure that the government can continue its operations even if there is no new national budget.