Budget talks

Department of Budget and Management (DBM) Secretary Benjamin Diokno was so bullish when he first presented to media the newly submitted bill on the proposed General Appropriations Act (GAA) for 2019. Implementing for the first time a “cash budget system,” Diokno described it as a “revolutionary” reform measure that will finally institute fiscal discipline in the Philippine bureaucracy.

Apparently impressed by the DBM-prepared 2019 GAA bill introducing this “cash budget” system, President Rodrigo Duterte endorsed it to the 17th Congress for approval in his 40-page budget message. President Duterte submitted the proposed 2019 cash budget bill on the same day, the third this time, he delivered his state of the nation address (SONA) before the joint sessions of the 17th Congress.

In the dramatic turn of events at the Lower House leadership change, President Duterte apparently forgot though to mention in his SONA having submitted the proposed “cash budget” bill for 2019 as among his administration’s legislative priorities. The Chief Executive reportedly even nearly walked out from his own SONA as opposing camps wrested for the House leadership.

Little did he anticipate, the President has unwittingly instigated a brewing “revolution” at the House of Representatives where the process of legislative approval of the budget bill start. Now, the Chief Executive must contend with the saber rattling at the Lower House that decided to suspend its budget hearings and demanded the return to the present obligation budget system.

Ironically, it came after the hostile takeover that saw the ouster of Davao del Norte Rep. Pantaleon Alvarez as Speaker and replaced by former president and now Pampanga Congresswoman Gloria Macapagal-Arroyo.

Thus, Duterte officials wondered aloud why there are now talks of re-enacted budget following the House leadership change.

This after, House committee on appropriations chairman, Davao City Rep. Karlo Nograles warned that the proposed shift to cash budget system may derail the passage into law of the proposed GAB bill for 2019 before the year ends. Nograles denounced the GAB 2019 bill as in contravention with President Duterte’s massive infrastructure program called “Build, Build, Build” which is supposed to be supported by the government spending for next year.

Instead, Nograles accused the DBM of implementing “Slash, Slash, Slash” on budgets across all agencies of government for next year.

Nograles, along with his counterpart, Senator Loren Legarda who chairs the Senate committee on finance, and several other House officials met with Diokno to discuss the budget policy stalemate but failed to resolve it. Hence, they are supposed to meet with no less than President Duterte last night at Malacañang to hopefully break the cash budget impasse.

For now, the economic managers of President Duterte who include the DBM Secretary are standing their ground on the proposed shift to cash budget system. What behooves the Duterte economic managers was the fact that as the Lower House were ranting against the cash budget system, it has already approved on third and final reading the proposed Budget Reforms Act bill. It is now pending approval at the Senate but which the House is now seeking to withdraw.

The proposed P3.757 trillion budget for next year coincides with the holding of the May 2019 mid-term elections in our country. If re-enacted, there will be no new capital outlays that re-electionist lawmakers could promise to their voters.

In his budget message, the President cited the fiscal year 2019 will mark the shift of the government’s present obligation-budget system to its first annual cash-based budget that his administration – going to its third year in office – intends to implement starting January 1 next year. The President further stressed the new cash-budget system will modernize the Philippine government budgeting process and procedures at par with international standards.

 “We also need to strengthen the Congress’ power of the purse by reiterating its power to appropriate and hold Executive agencies accountable, especially in the light of the landmark decisions of the Supreme Court,” the Chief Executive pointed out. This is obviously referring to, among other decisions of the High Court, the ruling that declared illegal and unconstitutional provisions on “pork-barrel” funds in the annual budget.

Once the 2019 GAA bill is approved into law, the President explained, all government programs and projects budgeted for the fiscal year should be implemented and delivered, inspected, and accepted until the end of the fiscal year will be settled within the same year.

Unfortunately, the President’s budget message – attached to the voluminous GAA bill for 2019 – somehow got “lost” following the tumultuous leadership struggle at the House of Representatives that marred the joint opening session with the Senate last July 23. Lost, in the sense, the feuding Congressmen failed to read and fully digest the President’s budget message and are now belatedly raising hell against the proposed cash budget bill for next year.

As the dusts settled from the tumultuous House leadership change, it was only last week it dawned upon lawmakers the so-called “revolutionary” cash budget system for 2019 was submitted for their approval.

Diokno reassured the lawmakers, however, all national government agencies that the DBM would allow them up to three-month period – following the end of the fiscal year – as Extended Payment Period. More importantly, the DBM Secretary underscored, the new cash-budget system will prevent under-spending that hobbled delivery of public services that plagues the bureaucracy. Such under-spending marked “incompetence” that caused inefficiency and worse, became source of corruption of the annual budget through these years.

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Finance Secretary Carlos “Sonny” Dominguez, the acknowledged head of the economic team of President Duterte, is our featured guest in today’s Kapihan sa Manila Bay at Café Adriatico in Remedios Circle, Malate.