A tenacious Budget Secretary Benjamin Diokno said the government will use the cash-based appropriations scheme even with the use of a reenacted budget after Congress failed to approve the General Appropriations Bill (GAB) last year.

The cash-based scheme will last until the end of President Rodrigo Duterte’s term, Diokno added.

The budget battle between the Palace and the House simmered anew over the interpretation of a resolution the Palace signed to put into effect the bridge allocations.

House Majority Floor Leader Rolando Andaya Jr. claimed the implementation of the new cash-based budgeting system will no longer push through with the signing of the resolution “extending the operation of the 2018 national budget.”

The cash-based scheme limits the use of government allotments to within a year, after which funds revert to the treasury.

“I would like to relay to you that the cash budgeting system will not push through this year because our beloved President has signed the resolution that extends the life of the 2018 budget for this year,” Andaya said during the House rules committee public hearing in Camarines Sur yesterday.

Andaya added Mr. Duterte “did away” with the system that the Department of Budget and Management (DBM) had pursued to reduce opportunities of corruption in the yearly government appropriations.

“The system is no longer that. In effect, the President by signing the resolution extending the life of the 2018 budget does away with a cash-budgeting system,” Andaya explained.

Diokno disputed Andaya saying he is propagating “false news,” as he asserted the President was determined to push through with the reforms in the budget scheme.

“Cash-based budget is still on this year and in 2020 to 2022,” Diokno told the Daily Tribune.

The House leaders are insisting on the return of the multi-year obligation-based budget system.

Indeed, Andaya appears mistaken in his appreciation of the resolution signed by the President since Joint Resolution 3 extended the validity of the MOEE (Maintenance and Other Operating Expenses) and CO (Capital Outlays), which according to Executive Secretary Salvador Medialdea, were mere “components of the 2018 General Appropriations Act (GAA).”

The Budget Secretary said the failure of Congress to pass the budget law on time will have lasting implications on government operations.

“Me and my DBM staff are still consulting with line agencies on the impact of the extension of the 2018 budget in the 2019 cash-budgeting system,” according to Diokno.

“I know that practically all appropriations have been released, except some lump sums like the miscellaneous personnel benefits fund and the pension fund. The harsh reality is that the overriding constraint in budget planning is the size of the deficit,” Diokno explained.

Furthermore, he said it implies that the extended appropriations will “eat up on the 2019 spending program.”

“Put differently, if the 2018 appropriations for an agency is extended to 2019, an equal amount for the said agency will be deducted from the proposed 2019 budget. In effect, the extension of whatever is left from the 2018 budget will not be allowed to bloat the 2019 expenditure program,” Diokno further clarified.

The signed resolution was submitted by Congress extending the validity of last year’s appropriations until 31 December 2019. This was confirmed by Medialdea in a text message to Palace reporters on Thursday.

The extension will ensure that the administration’s priority projects, such as disaster aid and relief efforts, and infrastructure building and maintenance, among other things, will proceed as planned.

“The country has been affected by several devastating calamities such as typhoons “Rosita” and “Ompong,” flash floods and flooding incidents as an effect of the southwest monsoon that severely hit Regions I, II, III, IV-A, IV-B, CAA, NCR, X, XII, and ARMM,” a portion of the resolution read.

“The onslaught of the said calamities destroyed vital infrastructure and affected the delivery of basic services to the affected communities,” it added.

Senate Majority Leader Juan Miguel Zubiri earlier had stated the 2019 budget might not be deliberated and signed by leaders of both Houses until 7 February.

The reenacted budget shall remain in force until such time that the GAB is passed into law by Congress.

“In light of recent developments, the DBM has released Circular Letter 2019-1 guiding national government agencies and instrumentalities in operating under a reenacted budget,” Diokno said.

National government agencies receiving allotment or Notice of Cash Allocation from the DBM are authorized to obligate the amount corresponding to their actual requirements for the first quarter of 2019 but not exceeding limits set by the agency.

“The DBM will continue to oversee the budgetary operations of the national government, especially as it runs on a reenacted budget for presumably the first quarter of 2019,” Diokno added.

“We will do what we can to minimize the damage to the Philippine economy, particularly public construction. You see, as early as the first working day of the year, we have come up with the guidelines for fund releases under the reenacted budget,” he said.

“The sooner the 2019 GAA is passed, the better for the economy and the Filipino people.

Ramping up our investments on infrastructure and social services will only be sustainable if the budget is authorized by Congress,” he explained.