Government running on recycled budget

For 1st Time in a Decade

MANILA, Philippines — For the first time since 2010, the national government is now running on a recycled budget.

Due to the failure of Congress to approve the proposed P3.757-trillion 2019 national outlay, the 2018 spending law was automatically reenacted on Tuesday, New Year’s Day, by operation of the Constitution.

It’s the first time that the Duterte administration is using the previous year’s budget.

The government would most likely use the recycled expenditure program for the whole of this month.

With a recycled budget, government employees will not yet receive their increased pay under the fourth tranche of the Salary Standardization Law (SSL), the Department of Budget and Management (DBM) said yesterday.

In a text message, Budget Secretary Benjamin Diokno said the fourth and last tranche of salary increases under the SSL would need to be deferred pending approval of the 2019 national budget. The increase was supposed to be effective starting Jan. 1.

“The fourth tranche (of SSL) has to wait for the approval of the 2019 budget,” Diokno said.

The Senate is expected to resume work on the 2019 budget when Congress reconvenes on Jan. 14 after a month-long Christmas recess.

If senators approve the outlay in one week, the Senate and the House of Representatives will then convene a conference to reconcile their divergent versions of the spending bill.

If the reconciliation process takes another week, the final version of the budget should be ready for President Duterte’s signature by the end of this month or the first week of February.

However, the budget conference could take longer, since Sen. Panfilo Lacson wants to flush out pork barrel funds allegedly inserted by House members in the expenditure program for next year.

On the other hand, House Majority Leader Rolando Andaya Jr. has vowed to expose and cut tens of billions in what he called “DBM insertions” in the outlay, including P6 billion for Sorsogon, home province of Diokno’s in-laws.

Andaya’s rules committee is opening an inquiry today into these appropriations in Naga City.

The administration’s economic managers have warned of a recycled budget’s adverse consequences on the economy.

But economists in the House said the effect would only be minimal and temporary.

One of them, Rep. Michael Romero of party-list 1-Pacman, said: “The negative impact would not be that significant and would only be for January. It would be in the one-month delay in the disbursement of funds for new projects.”

He said salaries would not be affected, since regular appropriations, including those for compensation and maintenance and other operating expenditures, could be released.

The release of money for new projects could be accelerated starting next month, he said.

In the meantime, agencies could continue working on or finishing roads, bridges, classrooms, airports, seaports and similar infrastructure undertaken and funded under the 2018 budget, Romero added.

Diokno and senators have blamed the House for the delay in approval of the 2019 budget.

According to Albay Rep. Joey Salceda, the President had wanted to sign the spending bill last Dec. 15.

Congress adjourned session for its holiday break last Dec. 14 without passing the P3.757-trillion proposed 2019 budget. Diokno had also warned that the delay in the passage of the 2019 budget would defer infrastructure and other capital expenditures.

He explained that the government would need to wait for the approval of the 2019 budget before it would be able to commence the rollout of new projects as capital expenditures cannot be reenacted based on assumption that projects funded in 2018 were already obligated or done.

The DBM estimates that government disbursements in the first quarter of 2019 would be P44 billion short.

On the other hand, Diokno said local government units would not have to worry about their internal revenue allotments this year as these are automatically appropriated. Debt service is likewise automatically appropriated.

According to Diokno, the DBM will release this week a new issuance to guide agencies on how to operate on a reenacted budget. “DBM will issue guidelines this week. Watch in its website,” he said.