Banking & Finance

House proposes Abandonment of the One Year Cash-Based Budgeting System

Date: 31 January 2019; Type: Legal News; Source: House of Representatives

Rep. Rolando Andaya, Jr. (1st District, Camarines Sur), Chairman of the House Committee on Appropriations, proposed the abandonment of the one year cash-based budgeting system as proposed in the National Expenditure Program (NEP).

Speaking during Wednesday’s Bicameral Conference Committee meeting on the proposed 2019 P3.757-trillion national budget, Andaya, head of the House contingent, said abandoning the cash-based budgeting is one of the issues that House Members have asked him to bring out during the bicam meeting.

“There is actually no legal basis for it and from an implementing agency’s standpoint and view, it will actually cost more harm than good,” Andaya said.

He said the Commission on Audit (COA) pointed out in its official statement on the matter that cash-based budgeting will cause more problems and will effect like what is happening now, the ballooning of accounts payable.

“That kind of system opens the doors for corruption dahil bago ka mabayaran, maglalagay ka pa,” Andaya said.

Senate Minority Leader Franklin Drilon, a member of the Senate continent expressed his approval and inquired how the proposal can be implemented.

Andaya said the abandonment of the one year cash-based budgeting can be implemented by proposing that the life of the appropriations cover for capital outlays (CO) and maintenance and operating expenses (MOOE) be extended for two years.

Senator Loren Legarda, Chairperson of the Senate Committee on Finance said she would have to consult with the other members of the Senate regarding the proposal to give way completely or to hybrid it.

Legarda who is the author of the budget reform measure, said that although she is in favor of fiscal discipline and a cash-based budget, she wants the budget to pass.

House Minority Leader Danilo Suarez said that during presentation of the budget by the Department of Budget and Management (DBM) at the House of Representatives, he questioned the cash-budgeting proposal of Secretary Benjamin Diokno.

“Our position at the House is that if the system is not broken, why are we going to fix it? We’ve been doing well with the present system, why change it,” he said.

Andaya also asked the Senate if they will agree to his proposal to the sourcing of P200 billion for amendments.

Drilon endorsed the proposal after getting a clarification from Andaya that whatever the amendments are, they should be within P200 billion.

Meanwhile, Legarda gave the assurance that the DBM will source the necessary funds for the mid-term elections and salary adjustments.

She said that she had talked personally with the DBM on these concerns and they assured her that the fund requirements for the May elections will be sourced from the P10 billion unutilized fund of the Commission on Elections (COMELEC), as well as from the Contingency Fund.

The fourth tranche of the Salary Standardization Law (SSL) 3, will be sourced from the Miscellaneous Personnel Benefits Fund (MPBF).

Andaya said that the mandamus case they had brought before the Supreme Court urging DBM Secretary Benjamin Diokno to release fund from the MPBF will now be rendered moot and academic.

“So finally he has just admitted na pwede pala,” Andaya remarked.

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