Diokno says ‘hybrid’ budgeting applies only to projects, not salaries

Budget Secretary Benjamin Diokno said Wednesday that the “hybrid” budgeting system for 2019 only applies to government projects and not in all items in an appropriation.

Payments for personnel services or the salaries of government workers, maintenance and operations expenditures, and procurement of equipment should be made within one year and three months.

“For projects, we agreed to extend up to end of June for payment,” Diokno said in a forum.

Diokno met with House majority leader Rolando Andaya, House Committee on Appropriations chair Karlo Nograles, and Finance Secretary Carlos Dominguez on Tuesday.

“Because next year is an election year, there will be an election ban, so we agreed that there will be some delay. So we agreed we will allow up to end of June for payment of projects,” Diokno said.

“We are considering the three-month spending ban in the 2019 mid-term elections,” he said.

The House of Representatives has opposed the cash-based budgeting system of the Department of Budget and Management (DBM), as it supposedly reduced the budget proposal for 2019 by about P10 billion compared with this year’s appropriations.

Under a cash-based budgeting system, agencies have only one year, with a three-month extension after the fiscal year, to settle payments for goods and services delivered compared with an obligation-based budgeting which has a payment period of two years.

Andaya said the House and the Executive have come up with a compromise on this issue and agreed to implement a “hybrid,” cash-based and obligations-based system for next year.

As a compromise, the appropriations will be valid for one year and six months under the hybrid system—instead of one year with a three-month extension.

Diokno, however, prefers to call it “transitory cash-based program,” rather than “hybrid budgeting.”

“We decided that we will extend the payment period for another three months. So it is one year and six months, but only for projects,” he said. —VDS, GMA News