Reposting: https://www.dbm.gov.ph/index.php/secretary-s-corner/press-releases/list-of-press-releases/1508-duterte-orders-adoption-of-cash-budgeting-system
Duterte orders adoption of Cash Budgeting System
On September 9, 2019, President Rodrigo Roa Duterte signed Executive Order (EO) No. 91, entitled “Adopting the Cash Budgeting System Beginning Fiscal Year 2019, and for Other Purposes”. Said EO becomes effective upon publication in the Official Gazette.
The Cash Budgeting System (CBS) will promote the faster implementation of government programs by ensuring that funding requirements for priority programs and projects are sufficient, maximized by agencies, and, even more importantly, delivered on time.
Unlike the previous obligation-based budgeting system where the implementation period for projects is open, this system promotes discipline, focus, and better operational planning among agencies as it funds only the programs and projects that can be implemented and completed within the fiscal year, and provides for a fixed implementation and payment period that must be strictly observed. This ensures the prudent use of resources, prevents wastage and corruption, and ultimately improves the quality and efficiency of public services.
Under the CBS, all appropriations shall be made available for obligation and disbursement only until the end of each fiscal year. Moreover, obligations incurred by the national government within each fiscal year should be implemented within the same fiscal year.
Payments for obligations incurred within the fiscal year may be made up to an extended period of three months after the end of the validity of appropriations against which they are obligated, unless otherwise prescribed by the Department of Budget and Management (DBM) upon consultation with the relevant agencies.
However, appropriations for financial subsidies to local government units (LGUs) will be available for obligation and disbursement until the end of the succeeding fiscal year, while appropriations for statutory shares of LGUs, such as the Internal Revenue Allotment, will be available until fully expended.
Moreover, the transitory provisions of the EO allow for extended implementation and payment periods for certain appropriations under the 2019 General Appropriations Act (GAA) for maintenance and other operating expenses (MOOE) and capital outlays (CO) for this first year of implementation, though appropriations for the aforementioned items remain valid for obligation only until the end of FY 2019. Particularly, the completion of construction, inspection, and payment for infrastructure CO should be made not later than the end of FY 2020, while the delivery, inspection, and payment of items under MOOE, as well as other CO, should be made not later than June 30, 2020.
This transition period will compensate for the time lost due to the late approval of the 2019 GAA and the election ban.
Earlier, President Duterte, in his veto message for the FY 2019 General Appropriations Act, stated that the government should have shifted from the usual obligation-based budgeting system to cash-based this year. He also announced the transition period he was affording to infrastructure programs up to December 30, 2020.
The FY 2020 Budget, similar to FY 2019 Budget, is prepared as cash-based and features the same transition period. In a press briefing held last August 27, DBM Acting Secretary Wendel E. Avisado noted that the Department is planning to transition to the full implementation of the Cash Budgeting System by FY 2022.
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For inquiries, further questions and requests for interview, please contact Hazel Intia.
Email: media@dbm.gov.phTelephone: (+632)-657-3300 local 2601
EO No. 91: Please click here to download
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