Press Release
December 13, 2021

HB 10373: Extending the Availability of 2021 GAA to December 31, 2022

Senate President Pro Tempore Ralph G. Recto
13 December 2021

Mr. President:

The essence of this bill is to extend the clock on the current national budget.

Appropriations bear expiry dates, for many good reasons.

Foremost of which is that taxes collected from the people in cash should be rebated to them in kind - promptly.

Expenditure, you know, is like justice. When delayed, development is denied.

Prior to 2019, validity of appropriations was two years. But that year, a presidential-ordered shift from obligation-based budget to annual cash budget shrank the spending window to one year.

Ano po implication nito?

Mainly, cash budgeting limits the incurring of obligations and disbursing of payments for goods and services rendered and accepted within the fiscal year.

Budget execution now hews to the calendar.

As such, there is now a Cinderella deadline. When the clock strikes to herald the new year, train carriages will not turn back into a pumpkin, like in the fairy tale, but, to a certain degree, it has the same effect--pulling out the financial plug on an enterprise.

Unused funds will now head towards one direction: the Treasury.

May merits naman po ang cash budgeting.

Because cash-budgeting is anchored on funding projects which can be completed within the fiscal year, it engenders appropriating the right amount which can be consumed within that year.

This means no more overbudgeting by an agency, or biting more than it can chew. You and I know that budget gluttony has been a longstanding bureaucratic sin.

Kaya naman madalas ang resulta sa isang fiscal year, ang isang ahensya ay nagkakaroon ng sapin-sapin budget. Mayroong new appropriations, continuing appropriations, fund transfers, and earmarked funds from off-budget items.

Despite these multiple sources, the theory is, if there's a deadline--the Cinderella hour--dangling over them, offices will speed up implementation.

In budget execution, it has been said that there is no better propellant than the dictum "If you don't use it, you lose it."

Well, these are beliefs on paper.

On the ground, this Utopian paradise of seamless spending conjured by bookkeepers are jarred by realities that builders must confront.

Unang-una, nagkakaroon ng slippage in the case of infrastructure, sa maraming dahilan.

Because a parade of typhoons batters us six months a year, we lose construction weeks to bad weather.

Nandiyan pa ang epekto ng holiday economics. Sandamakmak na mga pista opisyal na kakaltas ng tatlong linggo kada taon.

Madalas may supply crunch of materials and manpower shortage. Maraming ahensyang mayroong "technical deficit." Dagdagan mo pa ng red tape. At ang pinakamatindi, si COVID. When "circuit breaker" quarantines meant to stop its spread were pulled, it also had the effect of suspending construction work.

Kita naman po sa spending report card ang epekto.

Some P1.076 trillion in Fiscal Year 2021 allotments had not been obligated as of October 1.

Government-wide, only about 70 centavos for every budget peso had been obligated during the first three quarters.

Sa DPWH, 85 percent lang. Hindi pa kasama dito ang impounded funds.

These are some of the imponderables cash budgeting cannot anticipate.

Sa totoo lang, there is a whale of a difference between tabletop spreadsheet computing and real work by hardhat men with boots on the ground.

Even Taipans with billion-peso infra war chests will tell you that you cannot straitjacket infrastructure so tight that it leaves no wiggle room.

Kaya ang masasabi ko, the jury is still out on cash budgeting.

Maybe there is now sufficient wealth of experience with cash budgeting that can now be harnessed to provide improvements and innovation.

Naniniwala ako sa pagrerepaso, na walang batas na nakaukit sa bato. As the incubator of change, DBM has been called the laboratory as well as the lab rat of fiscal reforms.

Kaya nga buo ang aking paniniwala that with its heritage of ceaselessly challenging the status quo, bukas ito sa review . Like I said, it has never tired of building a better mouse trap.

Isang halimbawa ng dapat purgahin is the widespread practice of transferring expiring allotments in fund parking complexes like PS-DBM and PITC, where these are given a new lease on life.

This is no longer a tiny loophole, Mr. President, but a big escape hatch through which expiring allotments pass on their way to sanctuaries that PS-DBM and PITC provide.

This simulated obligation makes a mockery of the one year appropriation validity in the cash budgeting regime.

In the meantime, I will vote YES to this measure.

I vote YES in the hope that this is not the beginning of an annual Groundhog Day for us, when yearly, come December, like clockwork, we pass legislation to extend the validity of current year appropriations.

I vote YES, secure in the knowledge that programs with expiring funding like the school feeding of children, the hiring of contract tracers, the assistance to indigent hospital patients and books for schools, to name a few, will be extended.

Sa panahon ng gutom, bakit ka magsasauli ng pondong pambili ng pagkain?

I vote YES because by allowing appropriations to expire, and be returned to the Treasury, government is not punishing low-batt bureaucrats in low-energy agencies, but it is punishing the people.

Kung hindi kasalanan ng mga bata kung bakit napanis ang pondo para sa pagkain, bakit sila ang gugutumin?

As I cannot be a party to it, I vote YES, just for this particular GAA.

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