MISLEADING: Roque says cash-based budget ‘implemented,' 'worked’ in 2018
Claim: Presidential Spokesperson Harry Roque said that the Philippines used a cash-based system budget in 2018.
Roque said in a press briefing on August 14 that he, along with the country’s economic managers, will "stick with the cash-based system" because it has already been “implemented” and it “worked” in 2018.
Roque’s statement was about the House of Representative's suspension of the hearing of the 2019 P3.757 trillion budget “until further notice.” The “confused” lawmakers were concerned with the budget cuts that the new system will bring about.
Roque said that because of this system, 2018 projects should be done before the year ends.
The facts: The national budget that Congress enacted for fiscal year 2018 was still a one-year obligation-based budgeting system.
The Department of Budget and Management (DBM) only "recommended" that agencies use the proposed cash-based system to prepare for the use of that system in 2019.
According to the DBM's January 17 slideshow presentation on the proposed shift to a cash-based budgeting system, fiscal year 2018 “will still be obligation-based.” But the department also recommended to agencies to implement their respective budgets “as if” it is a cash-based one.
Since it was only a recommendation, agencies were not required to implement a cash-based budgeting system yet. There is also no report indicating whether agencies indeed followed the DBM's recommendation or if the cash-based budgeting “worked” for these them.
Some agency heads disagreed with the proposal.
For instance, Department of Public Works and Higways (DWPH) Secretary Mark Villar said the agency will “adjust” to the “challenging” proposed 2019 budget for DPWH, which is P93 billion lower. The agency would also lose their funds for some 125 flood mitigation projects.
Affected also are education and health. Commission on Higher Education Officer-in-Charge Prospero de Vera III said the new system will "severely hamper" the implementation of the free higher education law. The Department of Health's (DOH) Health Facilities Enhancement Program (HFEP) will have "no allocation."
What is the difference between the two systems? (READ: What is cash-based budgeting?)
In an obligation-based system, implementing agencies "obligate" or commit funds to a project that may not necessarily be done yet within the same year.
In previous years, the government followed a two-year obligation-based budgeting system.
This shifted to a one-year system in 2018 to prepare for the proposed 2019 cash-based budgeting system.
On the other hand, in a cash-based system, projects that are "not implementation-ready" will be removed from the proposed budget. Implementing agencies will only have one year to finish their projects and 3 months after it to make payments.
For multi-year projects, agencies are required to provide a breakdown of the annual cash flow. – Miguel Imperial/Rappler.com