Palace authorizes extension of 2018 maintenance, fund

PRESIDENT Rodrigo R. Duterte signed a resolution extending the availability of the 2018 national budget for the maintenance and other operating expenses (MOOE) and capital outlay (CO), pending delays in the passage of the 2019 budget, Executive Secretary Salvador C. Medialdea said Thursday.

Mr. Medialdea confirmed in a text message that Mr. Duterte signed a Congress joint resolution seeking the “extension of validity of (the) 2018 budget for MOOE and (CO) to Dec. 31, 2019.”

House Majority Leader Rolando G. Andaya, Jr. said during a hearing in Camarines Sur on Thursday that the President signed the resolution.

“It looks like the cash budgeting system will not continue this year because the President already signed that the resolution extending the life of the 2018 budget for this year),” Mr. Andaya said.

“In effect, the President, by signing the resolution extending the life of the 2018 budget, does away with the cash budgeting system,” he added.

The joint resolution amends Section 61 of Republic Act No. 10964 or the General Appropriations Act (GAA) to allow the validity of the MOOE and capital outlay appropriations for another fiscal year or until Dec. 31, 2019.

It stated that the unreleased 2018 appropriations can be used for MOOE and CO to fund “priority projects, aid and relief activities as well as for the maintenance, construction/repair and rehabilitation of schools, hospitals, roads, bridges and other essential facilities of the national government.”

It took note of typhoons and flooding affecting several regions in Luzon and in Mindanao that “destroyed vital infrastructure and affected the delivery of basic services to the affected communities.”

It also stated that the 2018 GAA has limited the release of the MOOE and capital outlay funds only until the end of 2018, contrary to the previous GAAs from 2014 to 2017, which allowed for the said funds to be released and obligated for a two-year period. If unspent, the 2018 appropriations will be automatically returned to the General Fund.

Congress also made the same plea via joint resolutions in 2002 and 2013 to extend the availability of the current appropriations for another year.

Separately, the Department of Budget and Management (DBM) said it expects to tap only 25% of the re-enacted 2018 budget over the first three months of the year.

In a Circular Letter dated Jan. 3, the DBM told national government agencies to only obligate at most 25% of the 2018 budget, which would cover requirements for the first three months of the year — the period when the government expects to operate under a reenacted budget.

A re-enacted budget means that no new projects can be implemented and salary hikes are frozen until a new budget is enacted.

The DBM expects the 2019 General Appropriations Act (GAA) to be signed into law by February.

“Pending the approval of the 2019 GAA, national government agencies receiving allotment or Notice of Cash Allocation (NCA) from the DBM are authorized to obligate the amount corresponding to their actual requirements for the first quarter of 2019,” according to the circular.

However, obligations should not exceed 25% of the appropriations for personnel services, maintenance and other operating expenses, and capital outlays in the 2018 budget.

The DBM’s instructions exclude appropriations for the creation of new positions, the fourth tranche of the salary standardization law, mid-year and year-end bonuses and cash gifts, clothing and uniform allowances, and productivity enhancement incentives.

However, the DBM will still release 2019 budget-level funding for retirement and life insurance premiums, Pension and Gratuity Funds, Special Purpose Funds, budgetary support to government corporations, Miscellaneous Personnel Benefits Funds, Contingent Funds, and Internal Revenue Allotments of local government units, as they are automatically appropriated every year.

“We will do what we can to minimize the damage to the Philippine economy, particularly public construction. You see, as early as the first working day of the year, we have come up with the guidelines for fund releases under the reenacted budget,” Budget Secretary Benjamin E. Diokno was quoted as saying.

“The sooner the 2019 GAA is passed, the better for the economy and the Filipino people. Ramping up our investments on infrastructure and social services will only be sustainable if the budget is authorized by Congress,” he added. —