THE Cabinet approved at its meeting on Monday night the P3.757-trillion cash-based budget for 2019 proposed by the Department of Budget and Management.
In a message to the BusinessMirror, Budget Secretary Benjamin E. Diokno confirmed that the 2019 budget was approved by President Duterte and the Cabinet as presented.
The DBM chief earlier said that the proposed budget, equivalent to 19.8 percent of GDP, will be submitted to Congress during the President’s State of the Nation Address on July 23.
Although the proposed national budget is technically lower than the P3.767-trillion budget for 2018, Diokno said in a briefing of the Development Budget Coordination Committee (DBCC) last week that the cash-based appropriation for 2019 is still up by 18.3 percent compared to the cash-based program in 2018.
The shift to cash-based budgeting is also projected to enhance the efficiency of national government disbursements, which are programmed to hit P3.833 trillion in 2019, equivalent to 19.8 percent of GDP, rising up to P5.362 trillion in 2022, or 20.7 percent of GDP.
Personnel services still received the biggest budget allotment among major expense items, at 31.5 percent of the budget. Capital outlays came in second with 20 percent of the pie.
This was followed by allotment to local government units at 17.1 percent, maintenance expenditures at 15 percent, debt burden at 11 percent, support to government-owned and -controlled corporations at 5 percent and tax expenditures at 0.4 percent.
Diokno said in the same message that the Department of Education continues to be the top recipient of the national budget followed by the Department of Public Works and Highways.
The next top recipients include the Department of the Interior and Local Government, including the Philippine National Police, Department of National Defense, Department of Social Welfare and Development, Department of Health, Department of Transportation, Department of Agriculture, Department of Justice and the Autonomous Region in Muslim Mindanao.
In an annual cash-based budget, contracts that should be implemented for the fiscal year should be fully delivered by the end of the year. But in a multiyear obligation-based budgeting, which was practiced prior to the shift, it is enough for the government to enter into a contract or “obligate funds” without requiring the actual delivery of goods and services within the year.
To maintain the aggressive spending strategy to sustain the momentum of the “Build, Build, Build” (BBB) program, the DBCC has also raised its 2019 deficit ceiling to 3.2 percent of GDP, from 3 percent. This is equivalent to P624.3 billion in 2019 and is projected to reach P774.4 billion in 2022.
The debt-to-GDP ratio is also seen to decline from 42.8 percent in 2018 to 38.8 percent in 2022.
The government is also confident that the country’s GDP would expand by 7 percent to 8 percent in the medium term. The DBCC is one of seven interagency committees that make recommendations to the National Economic and Development Authority (Neda) Board that is chaired by the President.
The committee advises the President on the level of annual government expenditures and the ceiling of government spending for economic and social development, national defense and government debt service.
It also helps the Neda Board on the proper allocation of expenditures for each development activity between current operating expenditures and capital outlays, and sets the amounts to be allocated for capital outlays broken down into the various capital or infrastructure projects.