Diokno to House: No budget negotiations, no concessions

UNACCEPTABLE “The House proposal is that we increase the deficit, which, of course, is not acceptable to us,” Budget Secretary Benjamin Diokno says. A bigger deficit, he adds, may be unmanageable and poses a fiscal risk. —EARVIN PERIAS

Budget Secretary Benjamin Diokno on Tuesday declared the cash-based appropriations system that he wanted to implement next year “nonnegotiable” and said the executive would yield nothing to the House of Representatives in a standoff over the P3.76-trillion proposed budget for 2019.

“We’re not talking of concessions … this is not a negotiation,” Diokno said at the Meet Inquirer Multimedia Forum.

If the House would not stand down, “we are ready for a reenacted budget,” he added.

Diokno said he had a breakfast meeting with Davao City Rep. Karlo Nograles, the House appropriations committee chair, and Sen. Loren Legarda, the Senate finance committee chief, and they told him that “they will return to us the [proposed 2019] budget, and we will increase the budget.”

“I said that’s not possible,” Diokno said.

House wants old system

Unwilling to accept the cash-based appropriations system, the House, which prefers the obligation-based budgeting system, suspended hearings on the proposed budget for 2019 last week to give the Department of Budget and Management (DBM) and the Development Budget Coordination Committee time to make “necessary changes.”

The executive branch put its foot down.

“Under the Constitution, the President’s mandate or role is to submit the President’s budget to Congress within 30 days after the State of the Nation Address [Sona]. In fact, we submitted it on the day of the Sona—it’s the second time that we have done this. This is meant to give them more time to evaluate the budget,” Diokno noted.

But “apparently they are not happy with the budget,” because “they want to increase the [budget] deficit level,” he said.

Diokno declined to disclose the legislators’ reasons for seeking a bigger budget.

Unacceptable

For 2019, the fiscal-deficit program is P624.4 billion, equivalent to 3.2 percent of gross domestic product, as the government wants to accelerate its ambitious “Build, Build, Build” infrastructure program.

“The House proposal is that we increase the deficit, which, of course, is not acceptable to us,” Diokno said, adding that a bigger budget deficit may be unmanageable and posed a fiscal risk.

Congress, Diokno pointed out, has no power to increase the executive’s budget proposal.

“So they are in a quandary because they want to have a higher budget — we don’t want a higher budget,” he said.

“Also, we feel that the role of Congress, according to the Constitution, is to review and either pass or reject the budget, that’s their role. That’s the role of the House and, of course, the role of the Senate is to propose amendment or concur with the House version,” he added.

“Apparently, the Senate has a different stand, the House has a different stand … You may choose to reject the budget as we proposed, and we are ready for a reenacted budget because that is also provided for in the Constitution,” Diokno said.

The Constitution, he noted, states that if Congress fails to pass the budget by December, then the current budget is deemed reenacted for the next fiscal year.

Plan B

“Our Plan A is to persuade them to pass the budget. If they cannot be persuaded, we go to Plan B, which is a reenacted budget,” Diokno said.

Malacañang is ready for a reenacted budget, he added.

“[W]e have a lot of savings—because projects already done this year cannot be done again next year, so these are savings so we’ll go to them next year, around January, and ask for a supplemental budget,” he said.

Even with a reenacted budget, the plan to use the cash-based system would not be abandoned, he said.

“Actually, what I have right now is some kind of a hybrid. The important thing is we cut the life of the budget from two years to one year. So we’ll operate under those terms and we will behave accordingly,” he said.

Diokno said that he had already asked senior DBM staff to review “line by line what will be the implication if it’s reenacted and see what can be augmented.”

For projects partially completed this year, these could still be funded next year, he said.

For additional funds, he said the executive would ask Congress for a supplemental budget.

Diokno said the DBM would decide its final approach to the standoff in two weeks’ time.

Meeting with President

The House, however, is trying to break the impasse earlier, with Speaker Gloria Macapagal-Arroyo and House Majority Leader Rolando Andaya Jr. meeting with President Rodrigo Duterte on Tuesday evening.

Presidential spokesperson Harry Roque said the President could not believe that the House was rejecting his proposed budget for next year.

If the House is really rejecting the proposed budget, it should explain to the President why, Roque said.

“As of now, I think [the President] is giving Congress the benefit of the doubt. He does not actually want to accept that for the first time, Congress is not acting on his budget,” Roque added.

The Senate decided on Tuesday to side with the DBM on the controversy.

“The entire Senate, in caucus, has agreed to support the President’s [cash-based budget],” Senate President Vicente Sotto III told reporters.

Sotto said the Senate would resume deliberations on the proposed budget of certain agencies.

The hearings will be based on the National Expenditure Program, not on the general appropriations bill, which the House has yet to approve, he said.

As for concerns that the approval of the 2019 budget would be delayed because of the standoff, Sotto said the matter was in the hands of the House.

“Delay? Maybe. The ball is with the [House]. We support the executive proposal,” he said. —With reports from Christine O. Avendaño and Leila B. Salaverria