₱3.757-T budget for 2019 up for Congress approval

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Budget Sec. Diokno says the 2017 budget has no allocation for charter change.

Metro Manila (CNN Philippines, July 13) — The proposed ₱3.757 trillion cash-based national budget for 2019 is ready to be submitted to Congress, following President Rodrigo Duterte's approval.

According to Budget Secretary Benjamin Diokno, the proposed budget  is in line with the government's two major priorities for next year.

"It is a continuation of what we had already done in 2017 and 2018. There are two major priorities: investment in capital or the Build, Build, Build (BBB) program and investment in human capital or investment in the people," Diokno said in an interview on CNN Philippines' Business Roundup.

He explained that the government would spend more for education, social welfare, and health projects, as well as the BBB program.

Under the proposal, the allocation for social services -- such as  education, health, housing, and cash grants -- is the biggest with 36.7 percent, but this is  lower compared to this year's 37.83 percent and the 40.34 percent in 2017.

Diokno said this is because the government is prioritizing infrastructure projects to keep up with other countries in Southeast Asia.

"We are allocating more money for infrastructure. In the past we spent less than two percent for infrastructure. We cannot afford to do that because we are lagging behind ASEAN neighbors," he explained.

However, the appropriation for social services next year is still the biggest since 1999. The President's multi-year average of 38.29 percent  so far is the highest compared to that of former presidents Benigno Aquino III (35.56 percent), Estrada (31.60 percent), and Gloria Macapagal-Arroyo (28.38  percent).

Economic services ranks second in budget priority with 28.4 percent, lower than 30.62 percent in 2018 but a tad higher than 2017's 27.55 percent. This will go to the BBB program and other projects for sectors such as agriculture, manufacturing, and tourism.

This is also higher compared to Aquino's multi-year average of 26.69 percent, Estrada's 23.54 percent, and Arroyo's 22.96 percent.

Funds for general public services such as maintenance of public order and safety and subsidies for local governments have 18.9 percent of the total budget proposal, higher than the current share.

For the first time since 2010, the allocation for debt payment will be higher at 11 percent.

The government has also alloted the biggest defense budget in the last eight years with five percent.

Cash-based set-up

The administration early this year shifted from an obligation-based to a cash-based budget.

(READ: Duterte OKs proposed P3.757-T cash-based budget for 2019 – Diokno)

According to Diokno, this move aims to help assure that the government's money will be spent to the last centavo.

In a cash-based set-up, agencies are required to spend their entire budget within a year. This is different from the previous system that allowed spending to be extended to two years.

"The beauty of the cash budget system is that you impose discipline on agencies. Do not put in a request if you think you cannot implement it the following year. Make sure that the budget you requested for can be implemented. You cannot think of a budget that's totally raw because that spells disaster," Diokno stressed.

This rule, however, will not be implemented for multi-year projects as long as the breakdown of budget per year is indicated.

"In the case of multi-year projects, there's no change. We still need what we call  a multi-year obligational authority for national government agencies, but you have to indicate how much you spend for [each year]," he said.

It also aims to avoid underspending, which Diokno said was a problem under the Aquino administration.

He said 13 percent of the national budget, equivalent to more than ₱600 billion, was not spent in Aquino's last two years.

"That's significant. [Those] projects [deny] the Filipino people," he said.

CNN Philippines' Rex Remitio contributed to this report.