AFTER reaching a “compromise” with the Palace, the leadership of the House of Representatives on Wednesday said the lower chamber will now resume its hearings on the 2019 proposed P3.757-trillion national budget.
In a news conference, Majority Leader Rolando Andaya Jr. said the meeting that he and Speaker Gloria Macapagal-Arroyo had with President Duterte and Special Assistant to the President Bong Go last Tuesday has opened “clear lines of communication” following a budget deadlock.
“I can suggest to the chairman [of the House Committee on Appropriations Karlo Alexei Nograles] that we now continue the budget hearings. The instruction is clear: over the break, we will resume, likewise, it’s a gesture of cooperation with the DBM [Department of Budget and Management] and the Senate,” he added. Congress is expected to take a break from August 16 to 27.
Amid issues on the country’s shift to a cash-based budgeting system, the House Committee on Appropriations had temporarily suspended the deliberations of the 2019 national budget.
Legislators crossed party lines because, they said, the “cash-based budgeting is not feasible, impracticable and inimical to the interests of our constituents.”
“The President opened the lines of communication on how the budget for 2019 will come out at the House of Representatives,” Andaya said.
With this, the majority leader said the Palace and House of Representatives agreed that the 2019 national budget is a “hybrid” of cash-based and obligation-based budgeting system.
“In a sense it’s a hybrid…. It’s not a full-fledged cash-based system,” Andaya said.
Realignment
While he declined to give further details of the agreement with the Palace over the budget, Andaya said the budget cuts in various government agencies will be restored with a possibility of realignment.
For 2019, the budget of the Department of Health (DOH) was decreased by P35 billion; Department of Education (DepEd), by P77 billion; and the Department of Public Works and Highways (DPWH), by P95 billion. There were also P5-billion reductions in the budgets of the Department of Social Welfare and Development (DSWD) and the Commission on
Elections (Comelec).
For his part, Nograles said the 2019 budget proposed by the DBM did not just reduce the funds for agencies like the DepEd, but also lowered the targets for the provision of classroom buildings, scholarships and other crucial services.
“For example, the number of youth to be assisted by the Department of Labor [and Employment] has been slashed, from 186,850 to 85,898; the number of college scholarships has been slashed, from 433,466 to 315,228; the target number of classroom buildings has been slashed, from 47,000 to 4,100; and the target number of sitios to be energized has been slashed, from 1,817 to 775,” Nograles said.
While House members understood the logic behind adopting a cash-based budget, “it’s not yet time” to make the shift, he stressed. “Maybe we can do this in 2020, but not 2019. Let the agencies first catch up with their spending.”
The Davao congressman noted that “underspending is not a problem” for the current administration, unlike its predecessor.
“The budget is 95-percent obligated; underutilization, not underspending, is the real issue,” he said.
‘Reenacted talk too premature’
Also, Nograles said it was still too early to talk about a reenacted budget. He warned, however, that adopting the DBM’s “Plan B” would have repercussions.
“It is only August. When do we usually begin to talk about a reenacted budget? When it’s December. I’m still very hopeful that we can resolve this among [ourselves],” he said.
Moreover, Andaya said President Duterte told lawmakers to do what is good for the public in terms of budgeting system.
“I leave it to you [members of Congress] to decide. Do what you feel is right. Hindi ako makikialam diyan [I won’t meddle there],” Andaya quoted the President as saying.
Suarez vs Diokno
In a separate news conference, House Minority Leader Rep Danilo E. Suarez of Quezon slammed Diokno for his poor appreciation of cash-based budgeting system that may not work in reality.
“Cash-based budgeting system is only ideal [for] developed nations, but in a developing country, I don’t think this is fair,” said Suarez.
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, which reached P3.767 trillion.
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.
Supplemental budget
Moreover, Andaya also raised the possibility of a supplemental budget to fund the implementation of the Bangsamoro Organic Law (BOL), as well as the Supreme Court ruling increasing the internal revenue allotment (IRA) of local government units.
“There were also suggestions that there will be a supplemental budget to be submitted because BOL was already admitted, that the budget of BOL is not in the present budget. It’s not there. Also, the Supreme Court decision regarding the deficiency in the internal revenue allotment.”
Earlier, Andaya said P160 billion is needed for the implementation of the proposed BOL and the Supreme Court decision increasing the tax share of local governments.
He said “budget space” must be created in the 2019 budget for these mandates, “which were not factored in” when the proposed P3.757-trillion outlay was being finalized by Malacañang.
Andaya said the Supreme Court’s July 4 ruling that the share of LGUs should be sourced from “all national taxes and not only national internal revenue taxes,” must be complied with, as well.
The IRA represents the LGUs’ 40-percent share from national taxes collected.
Prior to the Supreme Court decision, only BIR collections were reckoned with in the computation, and excluded Bureau of Customs collections. This meant that local governments were denied their share of the VAT and excise taxes paid on fuel and other imported goods.
With Mark Joseph Fernandez and Joahna Lei Casilao