DBM eyes P4.1-T budget for 2020

Even as this year’s national budget remains hanging, the Department of Budget and Management (DBM) has already called on agencies to identify their priority programs and projects to be funded under the proposed P4.1-trillion cash-based appropriations for 2020.

The ceiling for next year is 9.1-percent higher than the P3.757-trillion 2019 budget as contained in National Budget Memorandum No. 132 issued by Acting Budget Secretary Janet B. Abuel on April 12.

Next year’s appropriations will be equivalent to 19.4 percent of gross domestic product (GDP), which is projected to reach P21.2 trillion. This year’s budget has a slightly bigger share to GDP of 19.5 percent as nominal GDP is projected at P19.2 trillion.

Despite opposition to the cash-based budgeting system, it will continue to be implemented in 2020, Abuel said.

“This will limit agencies incurring obligations and disbursing payments to goods delivered and services rendered, inspected and accepted within the fiscal year. Payments for yearend deliveries may be settled until the extended payment period or the three months of the following fiscal year. This system, thus, promotes efficiency of expenditure planning and public service delivery by shifting the performance metrics to actual delivery of goods and services rather than obligations made or contracts awarded,” Abuel explained.

For 2020, the government will spend a total of P4.21 trillion, up 11.6 percent from the P3.77-trillion disbursement program for 2019.

Next year’s spending program will include P3.867 trillion in expenditures from the 2020 budget on top of P343.4 billion from previous years’ obligations mostly coming from the 2019 appropriations due to a two-year transition in the implementation of infrastructure outlays this year.

Disbursements as a share of GDP has been programmed by the Cabinet-level, interagency Development Budget Coordination Committee to inch up to 19.9 percent in 2020 from 19.6 percent in 2019.

The proposed 2020 national budget also includes P233.3 billion that Abuel said “will be paid under the extended payment period of the succeeding year—this is treated as part of the P4.1-trillion cash budget because line agencies will need to contract out and implement them during the fiscal year.”

Of the 2020 appropriations, 44.9 percent or P1.84 trillion will cover departments and agencies’ priority programs, projects and activities included in the so-called tier-one budget ceiling.

“Automatic appropriations (such as internal revenue allotment and net lending, among others) and special purpose funds (such as special shares to local government units and contingent fund) will account for another P1.346 trillion or 32.8 percent of the budget. This leaves a fiscal space of P911.7 billion to cover expanded and new programs/activities/projects in tier two, accounting for 22.2 percent of the total cash-based budget ceiling,” Abuel said.

For next year, Abuel said the Duterte administration would prioritize the acceleration of infrastructure, antipoverty and pro-employment spending through strategic infrastructure projects and by supporting the implementation of recent game-changing laws such as rice liberalization, universal health care and Bangsamoro autonomy.

“The shift to cash budgeting starting 2019 along with cash management reforms will ensure better planning, swift program delivery, and strengthen fiscal discipline as well as accountability mechanisms between appropriated budgets and program outputs,” she added.

Specifically, Abuel said the 2020 budget would finance P1.045 trillion in public investments on transport, agriculture, tourism and social infrastructure, up from P909.7 billion in 2019.

As such, infrastructure spending to GDP is projected to increase to 4.9 percent next year from 4.7 percent this year.

Abuel said the 2020 budget would also support the plan to institutionalize the Pantawid Pamilyang Pilipino Program (4Ps), operate the Department of Human Settlements and Urban Development, strengthen monitoring of the Department of Education’s K to 12 and technical-vocational programs, ensure financial sustainability of the Universal Access to Quality Tertiary Education Act, implement the unconditional cash transfer to poor households affected by the Tax Reform for Acceleration and Inclusion Law and improve the country’s risk resiliency and coastal resource management programs.