Given the budget crunch due to recession-battered revenue collection and bigger expenses to fight COVID-19, the Department of Budget and Management (DBM) has ordered agencies to look for savings from last year’s appropriations and prioritize pandemic response in their 2022 spending proposals.
As earlier directed by President Duterte in Administrative Order (AO) No. 41 he issued this month, Budget 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 is still unspent.
Mr. Duterte earlier extended the validity of the P4.1-trillion 2020 national budget up to end-2021.
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.
Limited fiscal space
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 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 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.
Expected recovery
On the other hand, this year’s tax and nontax revenue target was kept at P2.88 trillion —still below the prepandemic collections of a record P3.14 trillion in 2019.
For 2022, the budget deficit will 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, 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. INQ