THE leadership of the House of Representatives said on Tuesday that it has reached a compromise with the Executive Department for a hybrid budgeting system for the 2019 national budget, while there is also an agreement to restore the budget cuts of the Department of Education, Department of Public Works and Highways and Department of Health.
In a news conference, House Majority Leader Rolando G. Andaya Jr. said the agreement was reached following a meeting with House Committee on Appropriations Chairman Karlo Alexei B. Nograles, Budget Secretary Benjamin E. Diokno, Finance Secretary Carlos G. Dominguez III and Executive Secretary Salvador C. Medialdea.
Andaya said the legislative and executive departments will adopt a “hybrid” budgeting system for the 2019 national budget, which shall be a combination of cash-based and obligation-based budgeting system.
He said they also agreed to work for the passage on third and final reading of the 2019 national budget by October 12, 2018, as he gave assurances that there will be no reenacted budget for next year.
“We’ll work with them and cooperate to clear out misunderstandings. We have given each other the merits of our proposals, and we’ve agreed on it…. So, the so-called hybrid budget will push through,” Andaya said.
Andaya said the hybrid system will give government agencies up to a six-month extension to accomplish a project and disburse the allocated budget.
Meanwhile, Diokno confirmed on Tuesday Andaya’s claim that the House and Department of Budget and Management agreed on a hybrid budgeting system. However, Diokno refused to give further details on this kind of system.
Almost two weeks ago, Andaya had claimed that a compromise was already reached with the Palace on the budget impasse through an agreed hybrid of cash-based and obligation-based budgeting system.
This is why, Andaya said, the lower chamber decided to resume budget hearings after temporarily suspending it due to issues on the country’s shift to cash-based
budgeting system.
Among the issues raised by the House were the budget cuts in various government agencies.
This compromise as claimed by Andaya was, however, denied by Diokno, until before their meeting on Monday with the congressional leaders, noting that he did not know where the idea on the hybrid budgeting system came from.
“It’s either obligation-based or cash-based,” Diokno said during the forum organized by Economic Journalists Association of the Philippines.
He also stood firm that the cash-based budgeting system will result in projects being done much sooner.
Under a cash-based budgeting system, the projects listed in the budget must be fully delivered, inspected and accepted by the end of the fiscal year.
Payment should also be done within the fiscal year and up to a three-month extended payment period after the fiscal year for goods and services accepted by December 31 of the fiscal year.
On the other hand, under an obligation-based budgeting system, contracts awarded within the fiscal year can be delivered even after the end of the year. Inspection, verification and payment can also be done within and beyond the end of the fiscal year.
The proposed 2019 national budget is cash-based as opposed to traditional, multiyear obligations-based budgeting. The DBM has described it as the more efficient budgeting method since it limits incurring obligations and disbursing payments for goods delivered and services rendered, inspected and accepted within the fiscal year.
The obligations-based budgeting is common budgetary practice in the Philippines. It allows appropriations and obligations until the next fiscal year, extending the validity of funds to two years.
Owing to the limitations of a cash-based system, the 2019 budget is P10 billion lower in absolute terms compared to the 2018 General Appropriations Act (GAA), which amounted to P3.767 trillion.
The House of Representatives on Tuesday resumed its budget deliberations after suspending it temporarily over cash-based budgeting system issues.
Restoration
Moreover, Andaya said the lower chamber and the DBM agreed to restore the budget cuts of the DepEd, DOH and DPWH.
“We’ve agreed to restore some cuts. We will help each other in finding areas where we can source these cuts,” Andaya said.
For 2019, the DOH budget was cut by P35 billion; DepEd by P77 billion; and the DPWH by P95 billion.
With Bernadette D. Nicolas