MANILA, Philippines – Funds for education and health services may suffer deep budget cuts should the proposed P3.757-trillion budget for 2019 follow the cash-based budgeting system.

This was announced by House committee on appropriations chairperson Karlo Nograles in a press conference on Monday, August 13, two days after the House of Representatives suspended the budget hearings. 

District representatives want the Department of Budget and Management (DBM) and the Development Budget Coordination Committee (DBCC) to revert the proposed 2019 budget back to an obligations-based budgeting system, which is still being implemented this year. 

Under the cash-based budgeting system, the biggest budget cuts may be experienced by the Department of Education (DepEd) and the Department of Health (DOH) for their funds to construct new classrooms and health facilities, respectively. 

Nograles said DepEd’s proposed Basic Education Facilities Fund for 2019 suffered a whopping P69.4 billion cut compared to 2018, while DOH’s Health Facilities Enhancement Program (HFEP) fund was clipped of P30.3 billion. 

In effect, Nograles said this means DOH’s budget allotment for the HFEP’s capital outlay or infrastructure projects is zero for 2019.

“Based on the 2019 budget, there is no allocation for the Health Facilities Enhancement Program under the Department of Health. There’s no new constructions of health facilities,” he said.

What other agencies may suffer under a cash-based 2019 budget? Here is a list of several budget cuts various government agencies may experience under the proposed 2019 budget, as shared by Nograles on Monday:

“Ang nangyari po kasi dito sa tinutulak ng DBM na cash-based budgeting ay parang naging biktima ang Pilipino ng dagdag-bawas. Nagdagdag ng buwis, nagbawas ng benepisyo,” said Nograles. 

(Through the DBM’s proposed cash-based bugeting system, Filipinos are becoming victims of padding and shaving. They increased taxes but reduced benefits.) 

“Lumalabas po kasi na mas kaunti ang iskolar na mapapaaral, mas kaunti ang klasrum at health centers na mapapatayo, mas kaunti ang mga kalsada at tulay na mapapagawa, mas kaunti ang mga sitio na mapapailawan, at marami pang ibang mas kaunti,” he added. 

(It appears that there would be less scholars who can study, less classrooms and health centers to be constructed, less roads and bridges to be constructed, less barangays to receive lighting, and more other projects that would be reduced.)

What is a cash-based budgeting system? A cash-based budgeting system means that agencies have to spend their funds and implement their projects within the fiscal year.

Implementing government agencies are obliged to complete their project contracts by the end of 2019 regardless of obstacles like natural calamities, which may cause delays. Projects whose completion a government agency cannot guarantee will be removed from its proposed budget.

An extended payment period of 3 months after the fiscal year will be implemented to give more time for government agencies to make their payments.

They may also apply for a multi-year obligation authority, a document issued either for locally-funded or foreign-assisted projects implemented by government agencies, to authorize the latter to enter into multi-year contracts for the full project cost.

For now, there is a deadlock between the House and the DBM, as Budget Secretary Benjamin Diokno said they are ready to reenact this year’s budget should Congress reject the proposed 2019 budget.

Diokno said it was not possible to modify the 2019 budget as proposed by lawmakers because President Rodrigo Duterte has already submitted the proposal after his 3rd State of the Nation Address. 

But some lawmakers believe there is legroom for the executive to still change 2019 budget to address their concerns.

Nograles already vowed a timely passage of the 2019 budget despite the suspension of hearings. – Rappler.com