DBM revises budget allocation policy

MANILA, Philippines - Starting this year, the Aquino administration will no longer observe the two-year lapse for budget allocations of agencies, but will make this a yearly activity as part of the agency’s transparency and accountability advocacies.

Department of Budget and Management (DBM) Secretary Florencio Abad said the policy change would be among the new reform measures the government undertakes as it launches what it dubbed as a “new budget regime in 2013,” enhancing the government’s anti-corruption campaign.

“One of the major reform measures we aim to enforce in 2013 is the two-year lapse period for all budget allocations. We’re drastically changing that. This time, if you don’t use or obligate the budget allotted to you within the year, you lose it,” he warned.

Under previous administrations, departments and agencies of government enjoyed a two-year lapse period for their allocations, allowing a “carry over of their unused funds until the next year.”

Abad clarified, however, that the two-year lapse period would still hold for maintenance and other operating expenditures and capital outlay, while allocations for personal services would now lapse if they remain unobligated after the fiscal year.

Abad also emphasized the effect of the new regime on budget preparation and implementation this year.

“This reform ought to induce better planning of programs and projects across the bureaucracy, with agencies meticulously crafting their budgets so they can accomplish their targets by year-end,” he said in a statement.

“From an expenditure perspective, the one-year lapse period will help institutionalize pre-procurement activities the year before the budget is implemented, enabling faster budget execution among agencies,” Abad stressed.

“With all departments making the most of their yearly allocations, we can expect our spending performance to exceed its current trajectory, and consequently, reinforce our economic growth,” he continued.

Abad added that the shortened lapse period for budget allocations is a preparatory move for the “GAA-as-Release-Document” regime, which the government aims to roll out by 2014. GAA stands for General Appropriations Act.

Under this reform measure, the country’s GAA would act as a budget release document which would further expedite the release of yearly appropriations to departments and agencies.

“We are easing our transition into a GAA-as-Release-Document regime, which will allow us to hack away at a lot of red tape and make fund releases more efficient. At the moment, the process of releasing allotments to agencies can be elaborate and time-consuming,” he added.

“With the GAA standing as the overall release document, however, the release of allotments will be speedier and more transparent, because all budgetary items will be painstakingly outlined in the GAA itself,” Abad said.

“Altogether, what we’re aiming for is the fine-tuning of our budget processes, so that the country’s expenditure program will not only be results-oriented; it will, above all else, be an instrument of empowerment, so that Filipinos themselves will benefit and take their cue from our robust fiscal growth and good governance initiatives,” he added.