Senators divided on budgeting system

As Congress extended the validity of funds under the 2020 budget and the Bayanihan 2 law until next year, Senate leaders on Tuesday disagreed on the wisdom of doing away with the one-year cash-based budgeting and reverting to the two-year obligation-based system instead.

Senate President Pro Tempore Ralph Recto said he agreed that it would be better to return to an obligation-based budget, since the practice of extending the validity of appropriations practically every year was making the current system pointless.

“Anyway the cash is always used for both previous years’ payment for projects contracted and current cash disbursement,” he said in a Viber message.

But Senate Majority Leader Juan Miguel Zubiri and Sen. Juan Edgardo Angara, chair of the Senate finance panel, said cash-based budgeting was still the better option to ensure discipline and efficient spending by government agencies.

“Cash-based budgeting is the most ideal way to implement the national budget during normal times; however, remember that these are extraordinary times because of the pandemic, where spending was low in terms of several programs and projects of the government especially in the line of infrastructure and development,” Zubiri said in a Viber message.

“We haven’t even totally spent the funds for COVID-19 prevention and safety management,” he noted.

Angara also defended cash-based budgeting, saying government offices had not yet fully adjusted to the system. “Since the shift a few years ago, agencies haven’t quite fully adjusted yet and this is even more pronounced this year because of COVID-19 as agencies were not able to fully implement projects and programs,” he said.

“If we return to obligation-based budgeting, we may return to underspending again which we also don’t want,” Angara added.

Senate Minority Leader Franklin Drilon agreed, saying he preferred retaining the present cash-based system “to compel bureaucrats to act on budget within the year.”

The House of Representatives on Monday passed a bill extending the validity of 2020 appropriations until Dec. 31, 2021, and of the Bayanihan 2 until June 30, 2021.

The Senate on Tuesday passed bills also extending the life of the 2020 budget and the Bayanihan 2 bill on second and third reading, allowing the government to tap some P148 billion in current appropriations that remained unspent to date and would have lapsed this year. INQ