DBM to submit P5-trillion 2022 budget on Duterte’s final SONA

MANILA, Philippines — The Department of Budget and Management (DBM) has ordered government departments and agencies to jump-start their budgeting process for 2022 in order to submit President Rodrigo Duterte’s last spending plan in time for his final State of the Nation Address (SONA) on July 26.

Budget Secretary Wendel E. Avisado on Jan. 6 issued the national budget call for fiscal year 2022, contained in National Budget Memorandum No. 138.

In the DBM’s timetable, the p2022 budget documents should be printed on July 7-20, before submission to President Duterte on July 22.

On July 26 when the President addresses the resumption of Congressional session, the record P5.024-trillion budget proposal for 2022 will be submitted for the Lower House’s consideration and scrutiny.

As the bureaucracy had better adjusted to the pandemic, submitting the proposed 2022 budget on the same day as President Duterte’s sixth and final SONA will be the “ideal and most advantageous” time for the executive, Avisado said in a text message.

To compare, the 2021 budget proposal was submitted within the mandatory one-month period under the Constitution when Congress resumed session after its sine die break last year, but did not make it during the same day as President Duterte’s SONA on July 27, 2020, due to some adjustments taking into account the health and socioeconomic crises inflicted by the COVID-19 pandemic.

In the 2022 budget call, Avisado reminded national agencies that local government units will get a bigger internal revenue allotment (IRA) in 2022 as mandated under the Supreme Court’s ruling on the so-called Mandanas-Garcia petition, such that some functions and their disbursements will be transferred to LGUs.

Earlier estimates of the Development Budget Coordination Committee (DBCC) had shown LGUs IRA could balloon to as much as P1.08 trillion in 2022 compared to only P848.4 billion under the current way of computing IRA, or an additional P234.4 billion equivalent to 0.92 percent of gross domestic product (GDP).

At present, the LGUs’ IRA comes from 40 percent of national internal revenue taxes collected by the Bureau of Internal Revenue (BIR).

However, the Supreme Court ruling in 2018, which it reaffirmed in 2019, on the petitions of Batangas Gov. Hermilando Mandanas and former Bataan Gov. Enrique Garcia Jr. stated that the IRA must come from two-fifths of collections of “all” national taxes — including collections from import duties and other levies by the Bureau of Customs (BOC) on top of the BIR tax take.

Economic managers had warned that implementation of this high court ruling could “create a fiscal problem” as it would result in an “unmanageable budget deficit.”

It did not help that revenues weakened last year due to the pandemic-induced recession, which would impact not only on the national government’s spending but also on LGUs IRA in 2023.

As such, the 2022 budget call listed down the national government expenditures which will be fully devolved to LGUs due to the Mandanas-Garcia ruling, including health services, such as public hospitals as well as communicable and non-communicable disease control services, among others.

Amid a prolonged pandemic, Avisado said LGUs may have to take a bigger role in public health given their also larger budgets in 2022.

“That’s part of the devolution process, and we will input that into the planning and budgeting process as well,” Avisado said.

According to the budget call document, the Local Government Code of 1991 also allowed devolution of local infrastructure (for education, irrigation and trade), agriculture, natural resource management, environmental services, revenue mobilization, telecommunications, peace and order, employment facilitation, social welfare, transportation, tourism, and housing services functions to LGUs.

/MUF