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Legarda: Senate Supports President’s Cash-Based Budget

August 14, 2018

Senator Loren Legarda today said that the Senate supports the government’s move to shift from obligation-based to annual cash-based appropriations starting with the 2019 national budget.

Legarda, Chair of the Senate Committee on Finance, said that during their caucus on Tuesday afternoon, senators expressed their support to the President’s cash-based budget.

“The Senate supports a cash-based budgeting system that will help discipline the bureaucracy, addressing the problem of underspending, which has long plagued the government,” said Legarda.

“The Senate Committee on Finance will continue to conduct budget briefings based on the 2019 National Expenditure Program (NEP) that was submitted to Congress and we will introduce amendments as necessary,” she added.

The Senator explained that a cash-based budget would address underspending especially for programs that have low obligation rate, such as the Health Facilities Enhancement Program (HFEP), Farm-to-Market Roads (FMR), and the construction of school buildings.

An annual cash-based budget system means that agencies do not only obligate or award contracts for programs, activities and projects, but also ensure actual and full delivery of goods and services within the fiscal year.

According to the Department of Budget and Management (DBM), underspending in 2014 and 2015 was at 13% in both years, with combined amount of Php631 Billion.

Although government spending improved in 2016 when underspending rate was reduced to 4% and in 2017 at 3%, Legarda said that these still translate to billions of unspent funds—Php96.3 Billion for 2016 and Php85.2 Billion for 2017.

“With a cash-based budget system, projects will be done sooner, thus, people would also feel the benefits of government services sooner,” Legarda said.

The Senator also stressed that the Committee on Finance will exercise strong oversight during the budget briefings.

“We will scrutinize not only the proposed Php3.757 Trillion national budget for 2019 but also the performance of agencies, especially those that have high underspending rate. Our aim is to further help government efficiently spend public funds and deliver basic services to the Filipino people,” Legarda concluded.