DBM to agencies: Cough up 2020 savings, prioritize COVID-19 booster shots in 2022 spending bids

MANILA, Philippines — With a budget crunch due to recession-battered revenue collection yet bigger expenses to fight COVID-19, the Department of Budget and Management (DBM) has ordered agencies to not only look for savings from last year’s appropriations but also prioritize pandemic response in their 2022 spending proposals.

As earlier directed by President Rodrigo Duterte in Administrative Order (AO) No. 41 he issued this month, DBM Secretary Wendel Avisado instructed agencies in a May 21 national budget circular to identify items already released under their respective continuing 2020 budgets which had not been intended for COVID-19 response but were unobligated as of May 15 this year.

Unobligated appropriations meant contracts to implement the programs, activities, and projects were not yet awarded, hence the money set aside still unspent.

Duterte earlier extended the validity of the P4.1-trillion 2020 national budget up to the end of this year.

Avisado said agencies must submit on or before May 31 a report identifying and certifying their 2020 savings, which the DBM will consolidate and submit to the President.

“Within the executive branch, the President is authorized to declare and use savings to augment any deficient item related to measures intended to alleviate the effects of the COVID-19 pandemic, including provision for emergency subsidies to low-income households and disadvantaged or displaced workers affected by the pandemic” under AO 41, Avisado said.

Avisado said that while the legislature and judiciary have been enjoying fiscal autonomy, they were also “strongly urged to adopt and implement” AO 41.

In a separate national budget memorandum dated May 24, Avisado said there was “very limited fiscal space available” for tier two — new high-priority programs, activities and projects — in the fiscal year (FY) 2022 national budget, such that agencies needed to prioritize those which were “strategic and will yield the maximum results desired” in their respective proposals.

Avisado earlier told the Inquirer that the Cabinet-level Development Budget Coordination Committee (DBCC) maintained the 2022 budget ceiling at a record P5.024-trillion.

Last week, the DBCC programmed a wider budget deficit of P1.86 trillion for 2021, equivalent to 9.4 percent of gross domestic product (GDP), as this year’s expenditures were jacked up to P4.74 trillion from P4.66 trillion previously partly due to COVID-19 vaccine procurement.

On the other hand, this year’s tax and non-tax revenue target was kept at P2.88 trillion — still below the pre-pandemic collections of a record P3.14 trillion in 2019.

For 2022, the budget deficit would narrow to P1.66 trillion or 7.7 percent of GDP, as the projected P4.95-trillion disbursements were projected to exceed the P3.29 trillion in revenues on the back of an expected economic recovery post-pandemic.

In this regard, Avisado said fresh spending for next year must especially prioritize the purchase of COVID-19 booster shoots under the ongoing nationwide mass vaccination program.

“According to the vaccine expert panel, which is under the Department of Science and Technology (DOST), there is a need for booster shots to strengthen the immunity of those who already received the COVID-19 vaccine to prevent the adverse symptoms of the disease. This will provide added protection against the other variants of the virus to keep the public safe,” Avisado said.

Finance Secretary Carlos Dominguez III had said the government was looking for P75 billion in funds to also vaccinate teenagers and buy booster shots for up to 85 million Filipinos next year.

Also to be prioritized in the 2022 budget was the growth equity fund (GEF)  — the national government’s assistance to disadvantaged local government units (LGUs) which will be bestowed with more responsibilities next year alongside their larger internal revenue allotments (IRAs) with the implementation of the Mandanas ruling in full swing.

“The GEF aims to cover the funding and capacity development requirements of basic infrastructure and other programs, projects, and activities of poor, disadvantaged, and lagging LGUs to gradually enable them to implement the functions and services devolved to LGUs by pertinent laws more effectively and efficiently. The fund is time-bound and performance-based, and shall be provided to LGUs for a fixed time frame,” Avisado said.

Also among the priorities for next year’s budget included capacity development for LGUs; the establishment of the Virology Science and Technology Institute of the Philippines; the implementation of the Philippine identification system (PhilSys) or national ID; big-ticket projects under the three-year rolling infrastructure program (Trip); as well as family planning and nutrition programs to minimize prevalent child stunting (children who were smaller in height compared to healthier kids of the same age) in the country.

In Avisado’s memorandum, the DBM already identified P2.74 trillion under the proposed 2022 tier-one budgets for continuing programs and projects.

Last Friday, Socioeconomic Planning Secretary Karl Kendrick Chua also called on agencies to submit a list of doable and priority infrastructure projects which will be included in the public investment program (PIP) for the FY 2022 national expenditure program (NEP).