2020 funds now under full cash-based budgeting system

With cash-based budgeting in place, government agencies must spend 2020 funds within a one-year period or else lose them, according to the Department of Budget and Management (DBM).

“With the adoption of the cash budgeting system, all appropriations authorized under the fiscal year 2020 GAA [general appropriations act], including budgetary support to GOCCs [government-owned and/or -controlled corporations] and special accounts in the general fund, shall be available for release and disbursement for the purpose specified until Dec. 31, 2020,” a DBM circular read.

National Budget Circular No. 578, issued by Acting Budget Secretary Wendel E. Avisado on Jan. 6, contained the guidelines in releasing the P4.1-trillion 2020 national budget.In the past, the obligation-based budgeting system allowed release, obligation and actual spending of funds within a two-year period.

Meanwhile, the DBM said appropriations for infrastructure capital outlays, including subsidy releases to GOCCs for infrastructure projects, as well as maintenance and other operating expenses (MOOE) and other capital outlay items, can still be obligated before actual award of these projects, upon which the allotted amounts will be disbursed for payments to contractors and suppliers.

“The completion of construction, inspection, acceptance and payment for infrastructure-related capital outlays shall be made not later than Dec. 31, 2021, while the delivery, inspection, acceptance and payment for MOOE and other capital outlay items shall not be later than June 30, 2021,” the DBM said.

Also, “amounts appropriated under the fiscal year 2020 GAA as financial assistance to LGUs [local government units] released during the fiscal year shall be available for disbursement for the purpose specified until Dec. 31, 2021,” the DBM added.

The same timetables apply to funds covered by the P3.7-trillion 2019 national budget under Republic Act (RA) No. 11464 signed by President Duterte last December. The President allowed a one-year extension of the 2019 budget funds because implementation was delayed by over four months due to late approval.

The government underspent P1 billion a day from January to April last year as it operated under a reenacted 2018 appropriations. Congress failed to pass the budget on time due to squabbles over alleged “pork” funds.

As for appropriations for LGUs’ statutory shares such as internal revenue allotment (IRA) and various special shares from national taxes—such as those slapped on development and utilization of national wealth, tobacco excise taxes, gross income taxes paid by firms operating within economic zones, value-added tax and fire code fees—these funds would be available for obligation and disbursement until fully expended, the DBM said.

The DBM reminded agencies that after the end of the validity periods contained in the circular, all unreleased, unexpended and undisbursed funds would revert to the general fund and could no longer be spent.