Duterte issues EO adopting cash budgeting system

September 12, 2019

President Rodrigo Duterte has issued an executive order adopting the cash budgeting system starting the 2019 fiscal year.

EO No. 91, which Duterte inked on September 9, provides that all authorized appropriations shall be available for obligation and disbursement only until the end of each fiscal year.

"Obligations incurred by the National Government within each FY shall be implemented during the same FY. Goods and services corresponding to said obligations shall be delivered and rendered, inspected and accepted by the end of each FY," the EO read.

The EO provided for extended period of three months to pay for the obligations incurred for each fiscal year.

"Payments for obligations incurred shall be made until the end of the extended payment period , which shall be three months after the end of the validity of appropriations against which they were obligated, unless another period has been determined by the Department of Budget and Management (DBM), upon consultation with relevant agencies," it said.

Then Budget Secretary and now Bangko Sentral ng Pilipinas Governor Benjamin Diokno initially pushed for the institutionalization of a cash-based budgeting by asking Congress to pass a law. But the proposal did not pass during the 17th Congress due to the opposition of some lawmakers.

EO 91 also stated that appropriations covering financial subsidy to local government units shall be available for obligations and disbursement until the end of the succeeding fiscal year.

Meanwhile, allocations for the statutory shares of local government units shall be available for obligation and disbursement until fully expended.

Any unreleased appropriations and unobligated allotments at the end of the fiscal year and unpaid obligations and undisbursed funds at the end of the extended payment period shall be revert to the National Treasury.

They could only be allocated again by subsequent legislative enactment, the EO said.

For multi-year projects, the EO said there should be an issuance of a multi-year contractual authority by the Department of Budget and Management for the national government agencies and qualified government-owned or controlled corporations prior to the conduct of the procurement.

"The MYCA or equivalent authority shall cover the full project cost, and shall be the basis of the approved budget for the contract," it said. Celerina Monte/DMS