Executive, House break budget deadlock

TALKS in Malacañan Palace last Tuesday between President Rodrigo R. Duterte and Speaker Gloria M. Arroyo broke the deadlock over the Executive’s proposed national budget for next year, with a leader in the House of Representatives saying the chamber will likely resume deliberations and should be able to meet the deadline for the spending plan’s approval.

House leaders had questioned the reduction of the national budget to P3.757 trillion in 2019 — a mid-term election year — from 2018’s P3.767 trillion, fearing this would leave many local development projects unfunded. The Budget department had attributed the reduction to a shift to a “cash-based” system, which includes only projects that can be auctioned off and awarded within 2019, from one that is “obligation-based” which provides a two-year horizon for auctions and awards. The shift — which takes into consideration implementing departments and agencies’ disbursement limits — is a key step the Duterte administration has taken to end years of state underspending that has capped economic growth.

“We understand that a cash budgeting system from an economic manager standpoint; this is a step forward. But speedy implementation in one year’s time, we have to balance it,” House Majority Leader Rolando G. Andaya, Jr. said in a press briefing on Wednesday.

“We’d make adjustments inside. We can do that. There are also suggestions that there’ll be some supplemental budget.”

House Appropriations committee Chairman Karlo Alexei B. Nograles said in an interview over ABS-CBN News Channel that he did not oppose the cash-based system per se but wanted to give local governments time to adjust to a smaller budget, adding that implementation of the new framework should be moved to 2020 — the year after mid-term elections.

“I think I can suggest to the Chairman (Nograles) that we now continue the budget hearing. Clear naman ‘yung instructions ng Presidente (The President’s instructions were clear). So, over the (Aug. 16-27) break we will resume,” Mr. Andaya said.

Asked whether the chamber can approve the budget by its original target date on Nov. 30, Mr. Andaya replied: “Oo, oo, walang problema (Yes, yes, that’s not a problem).”

According to the Camarines Sur solon, a supplemental budget may have to be legislated to fund the implementation of the Bangsamoro Organic Law (BOL) and the bigger internal revenue allotment for local governments ordered by the Supreme Court. “The DBM (Department of Budget and Management) admitted that the budget for the implementation of the BOL is not yet in the present budget… [and neither is the] ‘yung decision ng

Supreme Court regarding… internal revenue allotment,” Mr. Andaya said.

At the same time, he clarified that the chamber “cannot have a supplemental budget na walang kaakibat na pondong pagkukunan

(without a corresponding funding source),” adding that such a bill will have to be filed in conjunction with one of the succeeding tax reform packages.

‘HYBRID’ BUDGET PROVISIONS

Also among the agreements reached at Wednesday’s top-level meeting was “a compromise to extend to one year and six months” allocations for select development imperatives.

Explaining such a “hybrid” scheme that straddles the cash- and obligation-based systems, Mr. Andaya cited the calamity fund as an example. “For example, the calamity fund, [can’t be spent] by the end of the year [when] wala pa naman bagyong dumadating (there is no typhoon yet). So you have to wait. That’s a hybrid,” he said.

In a briefing in Malacañang on Wednesday, Presidential Spokesperson Herminio L. Roque, Jr. said Mr. Duterte was to meet with Budget Secretary Benjamin E. Diokno and Finance Sec. Carlos G. Dominguez III to see where they could compromise with the House.

‘FOR AN ELECTION YEAR’

Earlier Wednesday, he told reporters that lawmakers he met with last Tuesday had pushed for a bigger 2019 national budget.

The Senate decided in a caucus late that afternoon, however, to back the Executive’s cash-based scheme and to continue holding parallel public budget hearings, even as the chamber would have to wait for the 2019 spending plan to secure House approval — as required by law — before giving its green light.

“Their desire really is to have the budget increased. They said for an election year, masyadong tight ang budget,” Mr. Diokno recalled.

“Maybe [for an] election year they want more projects. That’s natural: if you’re a congressman you want to impress… your constituents, you really need more projects.”

Sought for comment, Ramon C. Casiple, executive director of the Institute for Political and Electoral Reform, said in a mobile message: “It’s a question of access to funds in an election year. Cash-based budgeting favors government spending but disfavors electoral spending.” — and