Lawmakers question DBM’s shift to cash-based budget system

House Majority Leader Rolando Andaya Jr. on Wednesday said the chamber would reach out to the Department of Budget and Management (DBM) after several House members have questioned the agency’s shift to a cash-based budget system for the proposed P3.757-trillion 2019 national budget.

The House conducted an all-member caucus after many lawmakers have aired their concerns against the first-ever cash-based budget of the government, a shift from the previous obligation-based budget.

The issue came out two weeks after the chamber began budget deliberations on July 31.

“There’s a proposal by DBM to shift from obligation-based budget to a cash-based budget so this is causing some confusion to some members. They’re wondering why instead of the budget going up, it’s going down,” Andaya told reporters.

The congressman said many of his colleagues have perceived that the budget for their districts would be slashed because of the new budgeting system, with some proposing to overhaul the proposed budget.

“They were proposing courses of action some to the extreme of returning the budget, which of course we do not want to do,” he said.

Others were also concerned that their multi-year projects would be affected by the policy shift, Andaya added.

The DBM said under the cash-based system, all government programs and projects budgeted for the fiscal year should be implemented and delivered within the same fiscal year.

Budget Secretary Benjamin Diokno defended the new system, saying it would minimize underspending.

The Budget agency said under the cash-based budget, goods and services delivered, inspected, and accepted until the end of the fiscal year would also be settled within the same year, up to the three-month period following the end of the fiscal year.

However, Andaya said many government departments and lawmakers were used to the obligation-based budgeting.

“Cash-based kasi gagastusin mo yung kikitain mo sa taong ito. Ang obligation-based is pwede kang gumastos pero pwede mo na bayaran next year, kumbaga may credit line sa tindahan, na ‘yun ang kinasanayan natin at ng lahat ng departamento,” Andaya explained, adding that it is “the ideal” system although it would be harder.

“We were all in agreement that we make representation muna sa DBM before we proceed,” he added.

Andaya said he hopes that this would not hamper their timeline for the passage of the 2019 national budget.

At the start of the budget hearings, committee on appropriations chairperson Rep. Karlo Nograles questioned that the proposed 2019 budget was P10 billion lower than the P3.767-trillion national budget in 2018.

Diokno, however, said it was “misleading” to compare the P3.757-trillion cash-based budget to the 2018 obligation budget.

He explained that the cash-based equivalent was derived from the monthly disbursement program, net of accounts payables of agencies.

Thus, the 2019 budget is P439.4 billion or 13.2 percent more than the 2018 budget cash-based equivalent of P3.318 trillion.   /vvp

READ: Nograles questions ‘much lower’ 2019 proposed national budget