Senate supports cash-based 2019 budget

August 14, 2018

Senate President Vicente Sotto III said the Upper House has sided with the Department of Budget's cash-based scheme for the 2019 national budget.

Speaking after a caucus on Tuesday, Sotto said: "The entire Senate, in caucus, have agreed to support the president's budget re cash based obligations."

"The ball is with the House of Representatives," he added.

If the 2019 budget is re-enacted, Sotto said "it will only be for personal services and maintenance and operating expenses. Capital outlay must not be re-enacted. That is the Senate position."

Sotto's statement came as President Duterte and leaders of the House of Representatives will meeting Tuesday night in Malacanang.

Both Houses of Congress suspended budget deliberations due to differences with the cash-based budget which they say caused cuts in the outlay of many departments.

A cash-based budget system means that agencies do not only obligate or award contracts for programs, activities and projects, but also ensure actual and full delivery of goods and services within the fiscal year.

Senate Minority Leader Franklin Drilon called the suspension of budget deliberations and talks of a reenacted budget “foolish and counter-productive,” saying it will only make the president appear weak for being unable to pass his own budget despite having a supermajority in Congress.

Drilon said that the House of Representatives’ plan to return the proposed 2019 national budget to the executive “has never been done before,” said Drilon.

“It’s not a good practice and it will not lead us anywhere,” Drilon said. “It will prejudice every Juan Dela Cruz and it will be detrimental to the economy and the implementation of crucial laws such as the Bangsamoro Organic Law.”

“A reenacted budget is bad for the country and will reflect badly on the president as it will make him appear weak,” Drilon said.

If the budget is reenacted, Drilon said the implementation of the Bangsamoro Organic Law will be affected “because we will not be able to give to the Bangsamoro government additional funding necessary for its development, including the block grant amounting to approximately P60 billion to P70 billion.”

Drilon noted the landmark law requires additional funding such as P5 billion development fund annually for a period of 10 years, P7.2 billion for retirement benefits of employees who will be affected by the transition, and P1 billion during the transition, among others.

Drilon also said a reenacted budget will affect the economy, underscoring that government expenditure accounts for about 20 percent of the economy.

“If the government operates under a reenacted budget, then there can be no new programs and projects in 2019 to help pump prime the economy because there will be no capital outlay,” Drilon noted.

Drilon also said that a reenacted budget will be detrimental to government employees who are set to receive their fourth tranche of salary increase next year.

“If we have a reenacted budget, then goodbye to the salary increase for teachers, nurses, and the rest of the government workforce,” said Drilon, adding that when budget is not passed on time, the salary increase that can help them cope with inflation would be delayed.  DMS