Reenacted budget ‘detrimental’ to economic growth – Diokno

Budget Secretary Benjamin Diokno on Wednesday warned that a reenacted budget will be detrimental to the economic growth and development objectives of the Duterte administration.

Diokno explained that a reenacted budget for the 1st quarter of 2019 will reduce total disbursements

by an estimated 144 billion – if the budget is delayed by only one quarter.

If the proposed budget is not approved, reduction in total disbursements will reach up to a staggering 1220 billion in a year.

“The government intends to ramp up investments on public infrastructure, poverty alleviation and social services. And we are hopeful that the legislators will see the urgency and wisdom in passing at the soonest possible time, the national budget for 2019,” Diokno told reporters during an economic briefing in Malacañang.

The 17th Congress failed to pass the proposed 13.757-trillion budget for 2019 on time, as the two houses adjourned last week for the holiday season.

“Given the limited time, the Senate deliberations and the Bicameral Conference Committee is set for next year. So now we are faced with the prospects of a reenacted budget at least for the 1st quarter of 2019,” Diokno said.

What will happen?

Under a reenacted budget, Diokno pointed out that no new infrastructure projects can start “because the capital outlays component of the previous year’s budget cannot be deemed reenacted – only the personal services and the maintenance and other operating expenditures are deemed reenacted; capital outlays, let me repeat, are not deemed reenacted.”

“The reasoning is straightforward: You cannot fund and finish the same project twice, right? Hence, new projects will have to wait until the 2019 General Appropriations Act is passed into law,” he added.

However, Diokno admitted that large projects under the so-called MultiYear Obligational Authority (MYOA) will not be adversely affected, including the likes of the subway and the Philippine National Railway projects.

Also not affected are the 1600-billion internal revenue allotments for local government units and debt services, as they are automatically appropriated and will receive the budgetary allocations based on the 2019 National Expenditure Program.

He said the executive branch has not been remiss of its constitutional duty of submitting to Congress “within 30 days” of every regular session the proposed budget for next year.

In fact, Diokno said they submitted the budget to Congress shortly after President Duterte delivered his State of the Nation Address and did not wait for the 30-day period prescribed by law.

He lamented that it took the Lower House four months to pass their version of the General Appropriations Bill (GAB).

Meanwhile, Diokno said personal services like salaries, wages, pension and retirement and the like, and the maintenance and other operating expenses are deemed reenacted – but will be based on the 2018 level.

“This means that salary adjustments for civilian and military personnel which are programmed for 2019 will have to wait. I repeat: The fourth tranche of the salary standardization for government employees will be deferred until such time the 2019 General Appropriations Act is passed into law,” he said.