MANILA, Philippines – The Department of Budget and Management (DBM) will submit for Congress’ consideration the proposed P4.18-trillion 2021 cash-based national budget on July 20, when President Duterte delivers his fifth State of the Nation Address (Sona) before legislators.
Budget Secretary Wendel E. Avisado said in National Budget Memorandum (NBM) No. 135 dated May 20 that there will be no further extension beyond the adjusted May 25 deadline for agencies to submit their respective budget proposals for next year.
From the original May 11 deadline, the DBM last March gave agencies more time to prepare their 2021 budget proposals while enjoining them to do so online amid the COVID-19 lockdown.
Keeping the May 25 deadline will “ensure submission of the budget documents to the President within the date scheduled, in effect, July 20, 2020” under NBM 133 or the national budget call for the fiscal year 2021 issued by the DBM in November last year.
Last week, Avisado told the Inquirer that the DBM was working to submit the 2021 budget proposal to Congress during the same day as the President’s Sona.
Despite the COVID-19 lockdown, “we will manage and act much faster this time” in preparing the 2021 budget, Avisado said.
Last week, the Cabinet-level Development Budget Coordination Committee (DBCC) reduced the 2021 cash budget proposal to be pitched to Congress from the earlier plan to seek approval for P4.64 trillion in funds to be spent next year, no thanks to expectations of a slower revenue take in the near term.
The DBCC had slashed this year’s revenue collection target to P2.61 trillion, from the March projection of P3.17 trillion and the original 2020 program of P3.49 trillion.
The 2021 revenue goal had also been cut by the DBCC to P2.93 trillion from P3.85 trillion previously, while the 2022 program fell to P3.27 trillion from P4.31 trillion.
“Macroeconomic assumptions underlying the revenue program for 2020—gross domestic product (GDP), imports, and oil prices—are all lower because of the pandemic. GDP growth forecast is negative for 2020. All these conspire to lower the tax base of revenues. The medium-term outlook is more positive than for 2020 though. Overall fiscal program for 2021 to 2022 follows a realistic trajectory of recovery that allows for growth while maintaining fiscal discipline,” Finance Secretary Carlos G. Dominguez III explained last week.
The economic team projected GDP to decline by 2-3.4 percent this year, while imports would likely drop by 5.5 percent.
The share of revenues to GDP was estimated to decline to 13.6 percent this year from 16.1 percent in 2019.