DBM not backing down on cash-based budgeting

Aika Rey
DBM not backing down on cash-based budgeting
'We just want this legislated so that there's a structural reform so the next President will not go back to the old practice,' says Diokno

MANILA, Philippines – The budget department (DBM) will do what it wants to do.

In his weekly media briefing, Budget Secretary Benjamin Diokno on Wednesday, August 15,  said that the legislature has the prerogative to reject a cash-based budgeting system, but this will not stop the DBM from implementing it.

“The executive has the right to choose a budget system. But we just want [the cash-based budgeting system] institutionalized that’s why we want to a law passed,” Diokno said.

“We can do what we want to do without this Budget Reform Bill. We just want this legislated so that there’s a structural reform so the next President will not go back to the old practice,” Diokno added.

Diokno explained that the Constitution does not specify a certain type of budgeting system to be implemented.

“We don’t need the approval of Congress to implement this thing,” he said.

For the longest time, agencies’ budgets have followed two-year, obligation-based budgeting, which disburses payments as obligations or commitments that may not necessarily be delivered within the same year.

But the proposed shift to a cash-based budget would limit contractual obligations and disbursing payments to goods delivered and services rendered within the fiscal year. (READ: What is cash-based budgeting?)

In March, House Bill No. 7302 or the Budget Reform Bill which institutionalizes cash-based budgeting system was approved on third and final reading, but a movement within the House wants it recalled.

Tighter budget for 2019: Diokno said that lawmakers want a higher budget for 2019 in time for the upcoming midterm elections.

On Tuesday, August 15, Diokno met with Senate finance committee chairperson Loren Legarda and House appropriations committee chaiperson Karlo Nograles to discuss the budget deadlock after deliberations were suspended in both chambers.

“We just chatted, looked at our options. There is an interest to increase the budget because [they said] it was too tight for next year. But we told them how it is done,” Diokno said.

Diokno explained that the DBM had to consult with economic departments with the forecasts of revenue collections and the gross domestic product to determine the size of the budget.

He reiterated that they will not make concessions on the size of the proposed expenditure program, as the Congress does not have the power to do so under the Constitution.

But Diokno is still hopeful that a cash-based budget for 2019 will be passed, with the Senate expressing its support for it.

The submitted 2019 National Expenditure Program amounts to P3.757 trillion or 19.3% of the country’s projected gross domestic product for next year. 

This figure is 13% higher than the 2018 budget’s cash-based equivalent at P3.318 trillion. – Rappler.com

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.