By Chino S. Leyco
The Department of Budget and Management (DBM) is amenable to the proposal of the National Economic and Development Authority (NEDA) for the partial implementation of the Duterte administration’s cash-based budgeting following the delay in the general appropriations act (GAA).
Budget Officer-in-Charge Janet B. Abuel said it would be difficult to implement a full cash-based budgeting this year following the four-month delay in 2019 GAA as it will restrict payments for government’s projects to go beyond one year.
Aside from budget delay, Abuel also cited the election ban as another reason for the partial implementation of the cash-based approach of government procurement.
“Based on the veto message of the President for the 2019 GAA, he actually clarified that in view of the delayed passage for 2019, as well as the election ban, we recognized that it will be difficult to fully implement the cash-budgeting system which requires all government agencies to pay within the year,” Abuel told reporters.
“Because of that, the original transition plan [for obligation spending] or transition timeline was to move the payment or the deadline of the payment for the 2019 contracts and implementations to June 30, 2020,” she added.
For infrastructure projects, she said the deadline of payment was also extended to December 31, 2020 instead June next year.
Socioeconomic Planning Secretary Ernesto M. Pernia earlier said that while they support the implementation of the cash-based budget system, he also noted that new scheme needs to be reviewed to provide for circumstances that may cause delays in disbursement.
“If we are forced to adopt the cash-based budgeting which is limited in terms of validity of the budget then given the delay in the release of the budget, it’s going to be adverse to government spending,” Pernia said.
“So it would be prudent on the part of authorities regarding budgeting to temporarily postpone the cash-based budgeting requirement so government agencies can continue to implement projects beyond the period provided for in the budget,” he added.
He noted that if the payment period and budget validity are not extended, government agencies may decide to forgo implementing new programs and projects that are expected to take longer to complete.
Last Friday, the Duterte administration’s economic team formed “a catch up” plan that aims to fast-track implementation of infrastructure and socioeconomic programs to meet 2019 growth targets amid the impact of budget delay.
Finance Secretary Carlos G. Dominguez III said after the meeting of the Economic Development Cluster that officials of both the Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) are optimistic of meeting their disbursement program for this year.
“To enable them to attain their targets, it would require close cooperation and support of other government agencies by expediting the approval of permits and other requirements,” he said, as he expressed hope that “no major weather disturbance will disrupt the implementation of the projects.”
The social protection programs that were agreed to be implemented faster include the national ID System, 4Ps, social pension, unconditional cash transfers, and fuel marking program.
Dominguez said that aside from these programs, the government will also “double its efforts in the agriculture sector, which should expand by at least 2 percent per year.”
He explained that had the national budget been approved on time, growth in the first quarter of the year would have risen between 6.6 percent and 7.2 percent instead of the four-year low of 5.6 percent.
President Rodrigo R. Duterte signed this year’s budget only last April after the impasse in Congress.
Dominguez said that since the government worked on a re-enacted budget in the first quarter, there was about P1 billion underspending per day.
He, thus, stressed the need to put in a “carefully crafted and bold expenditure catch-up plan to enable us to hit a GDP growth rate of above 6 percent this year.”