Duterte wants ‘compromise’ on 2019 cash-based budget

Pia Ranada
Duterte wants ‘compromise’ on 2019 cash-based budget
Malacañang says the President will meet with Finance Secretary Carlos Dominguez III and Budget Secretary Benjamin Diokno 'to see if they can compromise with the House'

MANILA, Philippines (UPDATED) – President Rodrigo Duterte will meet with two of his economic managers in hopes of finding a “compromise” between the proposed 2019 cash-based budget and concerns of lawmakers.

“He agreed to meet (Budget Secretary Benjamin) Diokno and (Finance Secretary Sonny) Dominguez this afternoon to see if they can compromise with the House,” Presidential Spokesman Harry Roque told Rappler on Wednesday, August 15.

Duterte had spoken with Speaker Gloria Macapagal-Arroyo, House Majority Floor Leader Rolando Andaya, and Bohol 3rd District Representative Arthur Yap in between his events in Malacañang on Tuesday.

The House members relayed to him their concerns on the executive’s proposed cash-based budget system. Andaya was budget chief during the Arroyo administration. (READ: What is cash-based budgeting?)

“He told me that the congressmen spoke of their problems with the cash-based system,” said Roque in a DZRH interview.

The spokesman, however, said that Duterte will likely follow the recommendations of his Cabinet members.

“But like the President’s previous policies, he lets his Cabinet make the decision and he just makes sure all of the members are doing their jobs,” said Roque.

Contradiction? This move of Duterte’s is in contrast to Roque’s previous admonition of House members for “blocking” the 2019 budget.

Roque even accused the House majority of acting like the minority, and insinuated that the new House leadership, embodied by Arroyo, is the reason for the deadlock. Roque also emphasized that Duterte will not budge when it comes his support for the cash-based system.

Why it matters: The House and the executive are in a deadlock over the proposed 2019 budget. The House has suspended budget hearings after rejecting the cash-based system the executive wants to try for the first time next year.

Suspended budget hearings mean a delay in passing the government’s budget bill and may even lead to a reenacted budget which last happened during the Arroyo presidency.

The House has the primary task of passing the budget. Observers are waiting to see if Duterte will stand by his economic managers, who proposed the system in the first place, or if he would yield to the lawmakers led by his ally, Arroyo.

Unlike the House, the Senate is all for the cash-based system.

Why the impasse? Duterte’s economic team believe that a cash-based budget will reduce corruption and encourage government spending. Under this system, agencies will only be given funds that they can spend within one year through the complete implementation of projects.

In the obligation-based system, agencies are given funds for the entire project, even if realistically, they can’t complete it in one year. This has made tracking spending difficult, leaving room for corruption.

The House, meanwhile, says the cash-based system will lead to unreasonable across-the-board budget cuts. Diokno shot back saying lawmakers reject the new system because 2019 is an election year. – Rappler.com

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Pia Ranada

Pia Ranada is a senior reporter for Rappler covering Philippine politics and environmental issues. For tips and story suggestions, email her at pia.ranada@rappler.com.