On a rainy Saturday afternoon, House Appropriations Committee chairman Rep. Karlo Nograles sent out his surprise announcement via text message to his fellow House members. A similar text message was sent out to the media which read: “The House will be suspending budget briefings until further notice. Please inform all departments and agencies of the decision. Hold all budget briefings until further notice.”

The solon’s message is clear: There will be no further budget hearings until the Department of Budget and Management (DBM) bows down to the House of Representatives. Originally scheduled on Monday were the budget briefings of Department of Health and Department of Interior and Local Government. Due to inclement weather, these hearings were canceled, but even if weather permitted, the same would not have pushed through. Instead, press conferences were held and press statements were taken on what is shaping up as a deadlock between Congress (more particularly the House) and Malacañang.

The issue in contention is the cash-based budgeting policy being implemented by DBM, which Rep. Nograles said has a “Slash, Slash, Slash” effect on the 2019 budget — an ironic reference to the Administration’s “Build, Build, Build” infrastructure program. As opposed to obligations-based budgeting, this policy will require offices to spend their budgets within a fiscal year, thereby requiring them to be more strategic in proposing and implementing projects. Should the project exceed a fiscal year (and its grace period of three additional months), then the remaining budget will revert back to the National Treasury.

Our projects are delay-prone and contractors have endless reasons for their perennial failure to meet deadlines such as bad unpredictable weather (case in point, Bagyong Karding), right of way issues, political risks, etc. It is nearly impossible for government projects to finish on time, much less within a single year. But the advocacy of cash-based budgeting is for government offices to be more efficient, its budget requests to be more precise and to prevent government underspending.

House members prefer to revert back to obligations-based budgeting which allows two years for a project to finish. Budget Secretary Benjamin Diokno attempts to downplay solons’ concerns on cash-based budgeting by saying that said policy, once signed into law by the President, would not be immediately applicable as there would be a transition period of three years.

To clarify, cash-based budgeting has yet to find basis in law since House Bill (HB) 7302, otherwise known as the “Budget Reform Act,” is still pending before the Senate. Rep. Nograles initiated a House resolution after a caucus held last week, 8 August 2018, for the withdrawal of HB 7302, which has already undergone Third Reading by the House on 20 March 2018. Notably, President Rodrigo Duterte certified this bill as urgent.

Section 36 of HB 7302 reads, “All annual appropriations, including the GOCC’s program subsidies, shall be available for release, contractual commitment and disbursement until the end of the fiscal year. However, government agencies may still disburse funds not later than three months extended payment period from the end of the fiscal year for goods or services already rendered, inspected and accepted within the fiscal year.”

Is the House permitted to suspend budget hearings? Absolutely. This finds basis in the 1987 Constitution. Article VI, Section 24 thereof reads: “All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.” As the body where the Government Appropriations Act originates, the House may continue, suspend or even completely cease hearings on the budget at its discretion. The Senate may hold parallel budget hearings for efficiency but only in anticipation of the transmittal of the House’s General Appropriations Bill.

This finds further basis in the Supreme Court case, Tolentino v. Secretary of Finance, G.R. 115455, 30 October 1995, which provides that the insertion of the phrase “originate exclusively” in the 1987 Constitution highlights the constitutional framers’ intention to emphasize that appropriations bills must originate from the House alone and the Senate cannot enact its own revenue measures without said bill from the House. But after a revenue bill is passed to the Senate, only then would the Senate be able to pass its own version on the same subject matter. This is based on the coequality of the chambers of Congress.

What happens in case this deadlock is not fixed? Article VI, Section 25 (7), provides: “If, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed reenacted and shall remain in force and effect until the general appropriations bill is passed by the Congress.” A first under the Duterte administration.

At this point, neither side is budging. At the press conferences of Rep. Nograles and Majority Leader Rolando Andaya, it appears that the House members are ready to continue budget hearings. On the other hand, Diokno mentioned that they are fine with a reenacted budget for 2019. Presidential spokesman Harry Roque was more emphatic, stating that House members’ projects may be left unimplemented and, worse, they stand to lose a presidential endorsement in the elections next year. Senate Committee on Finance chairman Sen. Loren Legarda likewise suspended their own budget hearings due to this debacle.

Reenacted budgets are not new in the Philippines and it has happened before during the presidency of House Speaker Gloria Macapagal-Arroyo. This actually leaves more discretion on the part of President Duterte in 2019. And should the budget be the same as 2018, then those who received little or no budget this year will be treated the same in 2019. Where will this impasse end up? Let’s see and I think we don’t need to wait that long since elections are fast approaching.