EO out on cash budgeting system

MANILA, Philippines–President Rodrigo Duterte has signed Executive Order No. 91 for the shift to the cash budgeting system, from the present obligation budgeting system.

“There is a need to improve the fiscal planning of government agencies through the implementation of an operational cash budget and by setting deadlines for obligation of funds and execution of projects during the fiscal year, in order to speed up the implementation of programs and to prompt deliver goods and services to our people,” the directive read.

Under the previous obligation budgeting system, contracts awarded within the fiscal year can still be delivered even after the year has ended.

The directive noted that “significant gaps between the actual expenditure outruns and annual appropriations translate to billions of pesos of delayed and foregone services, which should have been delivered to the general public.”

The cash budgeting system requires that all authorized appropriations shall be available for obligation and disbursements only until the end of each fiscal year.

Obligations incurred by the national government within each fiscal year should also be implemented during the same fiscal year, and goods and services corresponding to said obligations should be delivered or rendered, inspected and accepted by the end of each fiscal year.

Payments for obligations incurred shall also be made until the end of the extended payment period, or three months after the validity of appropriations against which they were obligated.

The EO also stated that appropriations covering financial subsidy to local governments shall be available for obligation and disbursement until the end of the succeeding fiscal year, while appropriations for the statutory shares of local government units shall be available for obligation and disbursement until fully expended.

Any unreleased appropriation and obligated allotments at the end of the fiscal year, as well as unpaid obligation and undisbursed funds at the end of the extended payment period, shall be reverted to the national treasury.