The Department of Budget and Management (DBM) has pegged at P4.2 trillion the ceiling for the proposed 2019 national budget, which the country’s budget chief said will be mostly cash-based for the first time.
In a text message over the weekend, DBM Secretary Benjamin E. Diokno said that of the record obligation budget eyed for 2019, P3.7 trillion will be in cash.
Last Janary 3, the DBM issued National Budget Memorandum No. 129 containing the budget call for 2019.
“The agency budget proposals will continue to reflect administration policies such as the President’s zero+10-point socioeconomic agenda, the Philippine Development Plan (PDP), and the priority programs and projects contained in the 2017-2022 Public Investment Program, and will incorporate the 2019-2021 Three-Year Rolling Infrastructure Program,” the DBM said in a statement last Friday.
According to the DBM, starting with the 2019 budget is a yearly cash-based budgeting system.
“With annual cash-based appropriations, agencies can only incur contractual obligations and disburse payments for goods delivered and services rendered and inspected within the fiscal year, with an extended payment period of three months. This will effectively limit agencies to submit budget proposals reflecting payment of goods and services that will actually be delivered for the year,” the DBM explained.
Previously, the annual budgets had a two-year validity allowing appropriations as well as obligations until the next fiscal year, a practice which Diokno had lamented to have led to slow budget utilization among line agencies.
“The shift enforces the original intent of the appropriation law—for the budget, as it was planned and legislated, to be fully executed within the year,” Diokno said.
Also, shifting from a multi-year obligation budget to an annual cash-based system would “quicken program delivery, as well as strengthen the focus and accountability of the government as target outputs of government programs become more clearly linked to their appropriated budget,” according to the DBM.
A budget reform bill pending in Congress was aimed at institutionalizing cash-based budgeting “to promote the disciplined execution of the budget,” Diokno had said.
“Obligations are intentions, not expenditures. Hence, a cash-based budget will more accurately reflect the annual development plan of the government,” Diokno also said.
The 2019 budget will also strengthen the linkage between the national and regional as well as local governments, as the latter’s respective budgets and plans will be streamlined consistent to the administration’s priority programs and projects.
“In support of the Local Government Code of 1991 and the localization of the PDP 2017-2022, only priority programs and projects that can directly contribute to the results matrices of the PDP will be considered in the budgets of the regional line agencies,” the DBM said.
The medium term socio-economic blueprint – PDP for 2017-2022 – targets to slash unemployment rate to as low as 3 to 5 percent by 2022 from the 5.5 percent in 2016.
Under the 2017-2022 PDP, the reduction in the jobless rate will be done by sustaining 7 to 8 percent gross domestic product (GDP) growth in the medium term by pursuing the Duterte administration’s 10-point socio-economic agenda that is ultimately aimed at reducing the country’s poverty incidence to 14 percent in 2022.