Senators await House move vs cash-based budget, halt hearings

By Butch Fernandez & Jovee Marie N. dela Cruz

SENATORS, meeting in an unscheduled caucus on Monday, opted to adopt the House move suspending consideration of the Palace-proposed P3.757-trillion 2019 national budget to compel the Duterte administration’s economic managers to scuttle their cash-based scheme imposing huge cuts in the annual money measure.

Senate President Vicente C. Sotto III and Majority Leader Juan Miguel F. Zubiri, in separate interviews after their closed-door meeting, confirmed the leadership’s consensus  for the Senate to await final action on the issue by their Congress counterparts, citing the rule that all money measures emanate from the House of Representatives.

“We are still studying it [pinag-aaralan pa],” Senate President Sotto told the BusinessMirror. “Tomorrow [Tuesday], we will have a clear picture,” Zubiri told reporters after their meeting, even as he admitted they also agreed to “postpone the Senate budget hearing” scheduled for Tuesday.

Zubiri, who also chairs the Senate’s Rules Committee, pointed out that senators “cannot tackle the budget bill on our own,” adding that “it has to emanate from the House.”

He confirmed their decision to also “postpone our scheduled hearings” on the budget. 

Asked if he was backing the House leaders’ move suspending action on the awaited 2019 budget bill, Senate President Pro Tempore Ralph G. Recto said it is up to their congressional counterparts. “That [deferring budget deliberations] is the prerogative of the House,” Recto told the BusinessMirror.

Former Senate President Aquilino L. Pimentel III, however, said he was not endorsing it when asked if he was supporting the House move to compel economic managers to abandon  cash-based budget. “No,” Pimentel replied, adding: “I am interested about this cash-based budgeting.”

Sen. Francis G. Escudero, in a text message to the BusinessMirror, invoked “inter-chamber courtesy” when sought for his reaction on the brewing controversy.

“That is their decision and inter-chamber courtesy dictates that I should not interfere with House decisions,” Escudero said in a text message to the BusinessMirror. 

Escudero, however, earlier expressed “serious reservations” about the same issue during the Senate‘s plenary deliberations on the 2019 budget bill. The senator recalled citing “its negative impact on the administration’s  ‘Build, Build, Build’ projects given the foregone fiscal space of a cash-based budgeting.”

Escudero also noted the “lower agency allocation as the solution to underspending/low absorptive capacity instead of identifying and rectifying choke points/bottlenecks in the implementation of government programs; and, the absence of fiscal space that will give the administration enough elbow room to address unforeseen events, such as natural [i.e., flooding and earthquakes] and man-made [rising inflation and conflagration calamities].”

Sen. Sherwin T. Gatchalian told reporters he was still fixing a date for the Senate Committee on Economic Affairs to conduct hearings on the issue. “It was referred to the Economic Affairs, we are just fixing the schedule,” he said.

Middle ground

THIS developed as Minority Sen. Francis N. Pangilinan held out hopes that Malacañang and Congress leaders can find a middle ground to avert the scenario where the Duterte administration would be forced to operate under the old budget in 2019.

“Nothing is insurmountable in the disagreement between the Executive and Congress on the 2019 proposed budget,” said Pangilinan, adding: “Having a reenacted budget is an unacceptable scenario, especially as 2019 will be an election year.” Pangilinan pointed out that a reenacted budget “would mean that the President will have blanket authority to declare the capital outlay component as ‘savings,’ which will give it power to use the same for whatever programs, activities and projects the President wants.”

The senator added: “It means literally stuffing the President’s war chest with funds in an election year.” As it is, he said, “there are a number of lump-sum items in the budget,” aside from the billions of pesos in intelligence and confidential fund at the President’s disposal.

Reenacted budget?

AS the House and DBM are headed for an impasse on the adoption of annual cash-based appropriations, a lawmaker on Monday said a reenacted budget for 2019 was very possible. 

Albay Rep. Edcel C. Lagman said House members are all against Budget Secretary Benjamin E. Diokno’s cash-based budgeting system in lieu of the traditional obligation-based budgeting.

“The looming deadlock makes a reenactment of the 2018 GAA imminent as the remaining budget hearings have been suspended and the preparation of the General Appropriations Bill [GAB] for first reading has been stopped pending the necessary amendments by Diokno and the Executive of the President’s budget proposal for the next fiscal year,” Lagman said. 

In cash-based budgeting, only projects and programs which are implementable for completion and payment within the fiscal year and during the three-month extension period after the year-end are included for funding in the GAA. 

Obligation-based budgeting, on the other hand, includes in the GAA projects and programs the implementation, completion and payment of which could be made beyond the year-end—provided they are obligated within the fiscal year by contract or other modes of incurring obligation.

Absorptive capacity

DIOKNO said Malacañang’s proposed 2019 cash-based national budget is slightly lower than the previous year’s because it is based on each agency’s absorptive capacity and the readiness of the projects and programs for implementation. 

For his part, House Committee on Appropriations Vice Chairman Luis Raymund F. Villafuerte Jr. of Camarines Sur called on national government agencies to get their act together in implementing infrastructure projects. 

Villafuerte said the low absorptive capacity of certain national government agencies in implementing projects—as conceded by Diokno—has affected the allocation for infrastructure projects at the local government level. 

According to Action for Economic Reforms, in the United States, Congress is duty-bound at all times to legislate an appropriations act on time, and when it fails to do this, federal programs literally shut down. 

However, in the Philippines, the group said Congress is not subject to the same kind of pressure as the government agencies simply operate on the basis of the previous year’s budget. 

Amid issues on the country’s shift to cash-based budgeting system, the House Committee on Appropriations has temporarily suspended the deliberations of the 2019 proposed P3.757- trillion national budget.

Andaya: No reenacted budget

Majority Leader Rolando G. Andaya Jr. said the issues over the budgetary system would not result in a reenacted budget, saying the lower chamber is not moving toward that scenario. 

Andaya said Speaker Gloria Macapagal-Arroyo told lawmakers to just do their job and understand the 2019 proposed national budget submitted by the DBM.