Lawmakers want to revert to obligation-based budget system

In an ambush interview, committee chairman Karlo Nograles said lawmakers from both sides of the political fence opposed the cash-based system for the 2019 budget, which contained budget cuts in key agencies. (PNA file photo)

MANILA — The chairman of the House committee on appropriations on Thursday said lawmakers want to revert to the obligation-based budget system as they circulate a resolution for the recall of the budget reform bill, which institutionalizes an annual cash-based budget.

In an ambush interview, committee chairman Karlo Nograles said lawmakers from both sides of the political fence opposed the cash-based system for the 2019 budget, which contained budget cuts in key agencies.

“So after the caucus that happened yesterday, napagkasunduan ng mga miyembro ng House of Representatives na pumirma ng isangresolution seeking for the recall ng in-approve namin na budget reform bill (members of the House of Representatives have agreed to sign a resolution seeking for the recall of the approved budget reform bill),” Nograles said.

“Ang magiging implikasyon nitong pagbawi sa budget reform bill ay yung aming hindi pagsusuporta sa cash-based budgeting for 2019… So now, what the House is saying ayaw namin ng cash-based budgeting. Gusto namin ibalik sa obligation-based (The implication of recalling the budget reform bill is our opposition to the cash-based budgeting for 2019. So now, what the House is saying, we don’t want cash-based budgeting; what we want is to restore [the system to] obligation-based),” he added.

In an annual cash-based budget, contracts intended to be implemented for the fiscal year should be fully delivered by the end of the year while the multi-year obligation-based budgeting system allows the government to enter into a contract or “obligate funds” without requiring the actual delivery of goods and services within the year.

Nograles said House members saw that the biggest implication of shifting to a cash-based budgeting system is budget cuts across all departments, coining the move as “slash, slash, slash”.

He noted that the cash-based budgeting would lead to less funding for classroom buildings, health facilities, irrigation projects, roads and bridges, which usually take more than a year to complete.

Nograles said he will discuss the issue with members of the Development and Budget Coordination Committee (DBCC), as the lower chamber plans to revert to obligation-based budgeting.

“Now, we’re changing the premise. We’re back to obligation-based so you have no basis to these cuts, what are you going to do about it? Pag-uusapan namin ngayon (We’re going to discuss now) with DBCC, where do we go from here?” he said.

During the briefing of the DBCC at the House of Representatives last week, Budget Secretary Benjamin Diokno told lawmakers that the 2018 and 2019 national budgets are not strictly comparable, since the former is obligation-based.

“The 2019 cash-based budget cannot be directly compared to the 2018 budget, or any previous obligation-based budget for that matter. An appropriate apples-to-apples comparison would be to estimate the cash-based equivalent of the 2018 budget versus the 2019 appropriations,” Diokno said.

Diokno noted that the cash-based equivalent of the 2018 budget is PHP3.

324 trillion. Hence, the 2019 budget is actually PHP433 billion, or 13 percent higher than this year’s allocation.

Diokno said having an annual cash-based appropriations leads to greater fiscal discipline and prudent use of budget, faster and improved delivery of essential public services, and a more open and accountable government.