Tax reform,

BOOSTING SPENDING

While the economic team, led by the DoF, will push for the development of the agriculture sector, the Department of Budget and Management (DBM) said it targets to ensure that delivering projects, from allotments to actual completion, will be efficient and transparent.

The 2019 budget marks the first time the government will use a cashbased budgeting system following years of using obligation-based spending plans. This mandates that the awarding of contracts, implementation, and disbursement, should occur in one fiscal year.

“Under the old system, agencies may obligate their budget for up to two years. So it was common practice for agencies to select a contractor up to the end of year two; the implementation of the project will be done in year three, and with payment only being disbursed in year four,” Budget Secretary Benjamin E. Diokno said in an e-mailed response to questions.

“Clearly, this old system led to a slowdown in public service delivery. Worse, the ‘good’ contractors who have better alternatives are discouraged from doing business with the government,” he added.

A common misconception about new spending plan is that allotments for projects are reduced and multi-year projects are not allowed. But under the system, allotments and disbursements are simply staggered for multiple years, depending on the project, which seeks to address how in the past, some line agencies got their programmed budgets every year but only spent a portion of the amount — causing underspending.

Under the cash-based system, government agencies can only ask for funds that they are capable of disbursing in a given year. Tracking of agencies’ spending performance is also easier with the new setup.

“Cash-based budgeting is our best response to the slow,