Sen. Francis Escudero attended the hearing on the proposed 2019 national budget on Wednesday, Aug. 8, 2018. (Photo from his Facebook account)
Sen. Francis Escudero told the country’s economic managers during a budget briefing on Wednesday that cutting down the national budget would not address the issue of underspending.
“You cannot address government’s underspending by decreasing the budget,” Escudero said during the hearing, which was attended by Budget Secretary Benjamin Diokno.
“This is the first time in history that the budget went down,” Escudero said. “And this is designed precisely to address underspending to immediately reach near-zero underspending?”
Escudero’s question referred to the fact that only now that a succeeding year’s proposed budget was lower than that of the current fiscal year.
The government budget for 2018 was at a record-high P3.767 trillion, while 2019’s proposed budget is at P3.757 trillion – a P10 billion decrease.
Escudero noted that three departments had proposed budgets that went down – the Department of Public Works and Highway (DPWH) by P100 billion, the Department of Health (DOH) by almost P50 billion, DepEd (Department of Education) by almost P70 billion.
“Where did the differences go?” Escudero asked. “Did it go to personal services? Did it go to the free tertiary education that we passed? Where did it go? We just want to know where.”
Diokno pointed out that the decrease was merely an “illusion,” as the budget was cut down because the system had been “reformed.”
“It is just an illusion that we have cut and reduced the budget. But we have reformed the system. We only give them one year to obligate,” the DBM chief said.
“For example, if I give you P200 billion for one project, all you can do with it is obligate – nothing constructed by December of next year,” he said in Filipino. “So we really changed the system. What you can do this year, you have to obligate this year,” he added.
In previous reports, Diokno said that the reforms – or the government’s shift to a cash-based budget in 2019 from an obligation-based system – would reduce underspending.
With the shift, government agencies will be forced to spend their funds within the year or else, they would not be able to use it, even as savings.
READ: Duterte OKs P3.8-T cash-based budget for 2019
However, Escudero still disputed Diokno’s claim that the measure would cease underspending.
“It’s an illusion, too, to say that underspending went down because we allocated less money to them. You are not helping the agencies to increase their capability to implement bigger and larger projects which government can provide fiscal space for,” the senator said.
“Let the money be allocated to faster moving projects that can be finished in a year or give the money to local government units. Budget is always needed there and it will be used up for sure,” he added.
He also asked Diokno and other top economic policy makers to address problems in government projects, particularly in infrastructure programs.
“Our economic team must address the real choke points in infrastructure programs like lack of construction workforce, availability of aggregates, and delay in the bidding process. Cutting the budget won’t cut it, it only creates an illusion of efficiency,” Escudero said. /atm