Palace won’t blink at budget standoff with House

Presidential Spokesperson Harry Roque. INQUIRER FILE PHOTO / JOAN BONDOC

If members of the House of Representatives think they can scare Malacañang with a reenacted budget, they are mistaken.

The Palace, according to presidential spokesperson Harry Roque, will never cave in to the demand of the supermajority in the House to drop the shift to cash-based budgeting in 2019.

President Rodrigo Duterte’s allies in the House last week suspended hearings on Malacañang’s P3.76-trillion proposed budget for 2019, insisting on the retention of the current obligation-based budgeting.

Davao Rep. Karlo Nograles, chair of the House appropriations committee, said on Saturday that the House would give the Development Budget Coordination Committee (DBCC) time to make the “necessary changes.”

They’ll be the losers

Roque said on Monday that the Palace was “shocked” and “alarmed” at the move of the House supermajority, but he warned the losers would be the congressmen themselves: Their projects would be left unimplemented and they would lose presidential endorsement for next year’s midterm elections.

“The ball is in the hands of our allies in Congress, but we are not blinking,” Roque told reporters.

“We are not scared of a reenacted budget and the congressmen should ask themselves what will happen to their pet projects under a reenacted budget. It will be Malacañang that will determine which budget will be implemented. I don’t think they want that,” he said.

Roque said he had spoken with Finance Secretary Carlos Dominguez III and Budget Secretary Benjamin Diokno, who, according to him, “were not daunted by the possibility of a reenacted budget because that means the executive will choose the projects to be implemented.”

“In other words,” Roque continued, “we are not about to give in.”

But the congressmen were not swallowing the bitter pill.

“I hope that’s not how the executive views the House of Representatives. That we will just roll over and die, and give up whatever advocacy we’re taking up,” said House Majority Leader Rolando Andaya Jr.

Common ground

Andaya said the House would rather find a common ground with the Department of Budget and Management (DBM) and the DBCC than have a reenacted budget, which would give President Duterte greater flexibility to allocate public funds earmarked during the previous year.

The House was hoping the President would intervene to break the deadlock, Andaya said.

“We called for a break. Hopefully, we can get an audience with the President and get a clear signal [from him],” he said.

Budget cuts

Quoting Nograles, Andaya said the DBM’s cash-based approach to budgeting took away billions of pesos from primary state agencies that were at the forefront of the President’s infrastructure program.

He said that while the House was keen on exercising its constitutional power of the purse in insisting that the DBM apply the traditional obligation-based budgeting, the executive may flex its power of the veto to resolve the matter.

Nograles was firm that the DBM should drop cash-based budgeting, arguing that government spending would help ease spiraling inflation.

Under the DBM’s proposed system, he said, funds for the flood mitigation program of the Department of Public Works and Highways for next year were slashed by P20.8 billion.

“You cannot address the flooding and [the effects of] climate change by reducing flood control projects. In fact, you have to increase, not decrease, the budget for it,” Nograles said.

He reiterated that state agencies were used to planning their expenditure programs using obligation-based budgeting, which gave them up to two years to spend their budget.

With cash-based appropriations, he said, government offices would have to use their allocations within the fiscal year or else return the money to the state coffers.

“This is too much, too soon. I don’t think we’re ready for it,” he said.

Senate hearings suspended

The Senate has decided to suspend its own budget hearings as a result of the impasse.

Senate Majority Leader Juan Miguel Zubiri on Monday said Sen. Loren Legarda, head of the finance committee, was joining Nograles in a meeting with Diokno on Tuesday to try to resolve the matter.

Legarda will decide when to resume the budget hearings after the meeting, said Zubiri, who added that the Senate hoped the problem would be solved to avoid a reenacted budget, which would become “one big pork barrel for the administration.”

Not the first time

This would not be the first time the government would operate on a reenacted budget if the deadlock was not broken.

In 2001, the administration of then President Gloria Macapagal-Arroyo, now the Speaker of the House, operated on the P629-billion appropriations for 2000 because Congress had failed to enact a new budget, having been preoccupied with the impeachment of President Joseph Estrada in the previous year. Arroyo had to ask Congress for a supplemental budget of P10.9 billion.

Bigger war chest

In 2004, the Arroyo administration again had to make do with a reenacted budget, the P804-billion appropriations for 2003, because the House had failed to enact the P864.8-billion proposed budget for the new fiscal year for lack of funds.

For opposition Sen. Francis Pangilinan, reenacting this year’s P3.77-trillion budget for next year, an election year, is unacceptable, as it would give the President a bigger election war chest.

With a reenacted budget, Pangilinan said, the President would have blanket authority to designate as savings the capital outlay component of the appropriations, and the administration could allot these funds for whatever program the President wanted.

“It means literally stuffing the President’s war chest with funds in an election year,” Pangilinan said.