The miracle of vetoed budget

In keeping perhaps with the solemnity of the Holy Week just past, President Rodrigo Duterte did away the traditional signing ceremonies for the controversial 2019 budget bill with the usual presence of leaders and members of Congress. Instead, President Duterte quietly and inauspiciously signed last Monday Republic Act  (RA) 11260 or the General Appropriations Act (GAA) of 2019 with only his senior female police aide and Executive Secretary Salvador Medialdea as witnesses at his office in Malacañang Palace.

The Chief Executive ended the budget controversies by invoking his line-item veto powers under the 1987 Constitution. Thus, the approved GAA was P95.3 billion less than the original P3.757-trillion budget proposal that President Duterte submitted to the 17th Congress in July last year. As signed, the President approved P3.662 trillion expenditure program of the national government for this year. The P95.3 billion cut represents the total amount of vetoed provisions of the 2019 GAA.

The controversy-plagued 2019 GAA all started from the tumultuous change of House leadership from former Speaker, Davao del Norte Rep. Pantaleon Alvarez to former president and now Pampanga Congresswoman Gloria Macapagal-Arroyo during the joint opening at the Batasan Pambansa for the third and last regular sessions of the outgoing 17th Congress.

The President’s submission of the 2019 budget bill got eclipsed by the ensuing House leadership brouhaha on July 23 last year on the day of his state of the nation address. From that day on, the first signs of troubles for the proposed 2019 budget bill took roots and led to a series of controversies. Initially, the Congressmen balked at Department of Budget and Management (DBM) Secretary Benjamin Diokno’s proposed reform to fully implement the cash-based budgeting system under the proposed 2019 budget bill.

Under a cash-based budgeting, cash has to be spent within a year with a grace period of three months at most of the next succeeding year. The government previously adopted an obligation-based budgeting, wherein payments are released as commitments or obligations, without any time-bound limits.

Under the old budget system, contracts can be delivered even after the year it was awarded. Economic managers – who included Diokno – justified the shift to annual cash-based budgeting would fast track the delivery and completion of government programs and projects and prevent under spending, if not plug sources of corruption.

In retaliation, the House subjected Diokno to a “Question Hour” to which he initially cooperated before snubbing it eventually. This, after some House leaders accused Diokno of allegedly having favored certain private “contractor” related to his daughter in getting “juicy” government projects.

The President and his economic managers stood squarely behind Diokno amid calls by House leaders for the removal of the DBM Secretary from the Cabinet. President Duterte ultimately appointed Diokno as the new Governor of the Bangko Sentral ng Pilipinas on March 23 following the death of erstwhile BSP Gov. Nestor Espenilla Jr.

The strings of the 2019 budget bill controversies consequently delayed its approval before Congress adjourned for Christmas recess. As allowed under our country’s Constitution, the previous year’s budget automatically kicks in. For almost three months this year, the national government operated under the re-enacted budget while the Senate and the House still tangled over a conflicting version of the final consolidated version of the 2019 budget bill.

Effectively, the President’s veto virtually upheld the Senate objection to the P95.37 billion worth of re-alignments made by the House members post-bicameral conference committee approval of the 2019 budget bill. The President based this after the Cabinet vetting done on the “conditional signature” made by Senate president Vicente Sotto III who pointed to this post-bicam changes that miraculously got printed in the enrolled copy of the proposed 2019 budget bill.

Despite the veto, it was not all a loss for Congressmen after President Duterte agreed to extend until Dec. 31 this year obligating funds for their pet projects to be paid by the national government until Dec. 31, 2020. Thus, no cash budget system for this year.

Cabinet Secretary Karlo Alexie Nograles disclosed these to us during our Kapihan sa Manila Bay at Café Adriatico last Wednesday, or two days after the 2019 GAA was signed. It was the second time for him to guest in our breakfast news forum that we hold weekly at the Remedios Circle in Malate. The first time was in September last year when he was still Congressman from the first district of Davao City where President Duterte resides.

Nograles was then the outgoing chairman of the House committee on appropriations before he was unceremoniously replaced by Congressman Rolando Andaya. Before he bowed out as House appropriations committee chief, Nograles turned over the 2019 budget bill to the Committee of the Whole of the entire House. Subsequently, President Duterte appointed the 42-year-old Nograles to become his new Cabinet Secretary.

Nograles explained in detail during our Kapihan sa Manila Bay the 13-page presidential veto message on why P95.3 billion of these provisions got cut out from the 2019 GAA. The bulk of the P95.3-billion vetoed items were public works projects that were not identified in the President’s original budget, Nograles noted. 

Hence, these were the insertions of “pork-barrel” that were vetoed.

Nograles recited the President’s previous declarations he would not sign anything illegal, including the Supreme Court ruling on the “pork-barrel” case, nor anything that does not conform to the Constitution.

The Cabinet Secretary conceded that the vetoed P95.3 billion meant less budget that could have been allocated to the administration’s priority expenditure program for this year.

Nograles though admitted the P95.3 billion cut could be resurrected “theoretically” through supplemental budget for this year. But this miracle will happen though in the next Congress.