DBM bares rules on how gov’t will work with reenacted budget

The Department of Budget and Management (DBM) on Thursday issued the guidelines on how the Duterte administration will operate under a re-enacted this year.

“In light of recent developments, the Department of Budget and Management (DBM) has released Circular Letter No. 2019-1 guiding national government agencies and instrumentalities in operating under a reenacted budget,” Budget Secretary Benjamin Diokno said in a statement.

“The Circular Letter covers the release of funds in the first quarter of 2019 in anticipation of the passage of the 2019 General Appropriations Act (GAA),” Diokno said.

Both the Senate and the House of Representatives adjourned for the holidays on Dec. 14, 2018, without passing the proposed P3.757-trillion General Appropriations Act for 2019. Sessions will resume on Jan. 14, 2019.

Pending the Congressional approval of the 2019 budget bill, the national budget for fiscal year 2018 is deemed re-enacted as mandated by Section 25 (7), Article VI of the Constitution.

The 1987 Constitution states that, “If, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed re-enacted and shall remain in force and effect until the general appropriations bill is passed by the Congress.”

Working under a re-enacted means that the government cannot fund programs with appropriations under the proposed 2019 budget.

The re-enacted budget shall remain in force until such time that the proposed 2019 budget bill is passed into law by Congress.

According to the DBM circular letter, national government agencies receiving allotment or Notice of Cash Allocation (NCA) are authorized to obligate the amount corresponding to their actual requirements for the first quarter of 2019, but not exceeding the following percentages:

Chargeable Against Agency-Specific Budget

Personnel Services (PS) - Twenty-five percent of the PS level using actual salary requirements as of end-2018 but not to exceed the level provided under the 2019 National Expenditure Program (NEP).  This PS level shall exclude the built-in funds in the agency for the creation of new positions and fourth tranche compensation adjustments; mid-year bonus; year-end benefits and cash gift; clothing and uniform allowance; Productivity Enhancement Incentive

Maintenance and Other Operating Expenses (MOOE) - Twenty-five percent of regular programs and ongoing foreign-assisted and locally-funded projects under the 2018 GAA and 2019 NEP, whichever has the lower amount.

Capital Outlays (CO) - Twenty-five percent of regular programs and ongoing foreign-assisted and locally-funded projects under the 2018 GAA and 2019 NEP, whichever has the lower amount.

Chargeable Against Automatic Appropriations

Retirement and Life Insurance Premiums (RLIP) - Equivalent to 12 percent (or the applicable rate otherwise provided under special laws) of the salaries component chargeable against agency-specific budget as mentioned in the said Circular.

Meanwhile, the DBM said it will issue a Special Allotment Release Order (SARO) based on the agency’s Special Budget Request on items such as:

Charges against the Pension and Gratuity Fund, as reenacted, for the actual requirements for retired government employees and actual requirements for pension benefits of military and uniformed personnel; the amount of releases shall be based on the number of pensioners and rates as of December 31, 2018.

Charges against other Special Purpose Funds such as Budgetary Support to Government Corporations (BSGC), Miscellaneous Personnel Benefits Funds (MPBF), Contingent Fund (CF), among others;

Chargeable against Automatic Appropriations such as the Internal Revenue Allotment (IRA) of provinces, cities, municipalities and barangays corresponding to their requirements for the first quarter of 2019 based on the 2019 NEP.

“All SAROs to be issued chargeable against the FY 2018 Budget as outlined in Circular Letter 2019 - 1 shall be valid for obligation while the 2019 GAA is not yet in effect,” Diokno said.

“The DBM will continue to oversee the budgetary operations of the national government, especially as it runs on a reenacted budget for presumably the first quarter of 2019,” he added.

The Budget chief also emphasized that the DBM has come up with the guidelines for fund releases under the reenacted budget as early as the first working day of the year.

“We will do what we can to minimize the damage to the Philippine economy, particularly public construction,” Diokno said.

“The sooner the 2019 GAA is passed, the better for the economy and the Filipino people. Ramping up our investments on infrastructure and social services will only be sustainable if the budget is authorized by Congress,” he added.  —NB, GMA News