DBM proposes P4.1 T budget for 2020

MANILA, Philippines — The Department of Budget and Management (DBM) has pegged at P4.1 trillion the proposed national budget for 2020, which will be used to fund the administration’s priority programs, such as infrastructure projects and recently signed legislative reforms.

 Based on National Budget Memorandum 132 issued by Budget Acting Secretary Janet Abuel on April 12, the government’s proposed budget for next year will be 9.1 percent or P343 billion higher than the 2019 appropriations of P3.757 trillion.

Abuel said the national budget for next year would still be cash-based to ensure the faster implementation of project and delivery of services.

Under this form of budget, agencies are limited in incurring obligations and disbursing payments within the fiscal year. Payments for year-end deliveries may be settled until the extended payment period (EPP) or within three months of the following fiscal year.

“This system, thus, promotes efficiency of expenditure planning and public service delivery by shifting the performance metrics to actual delivery of goods and services rather than obligations made or contracts awarded,” Abuel said.

Of the total budget next year, Abuel said around 44.9 percent of P1.84 trillion would be earmarked for Tier 1 programs and projects.

Automatic appropriations--including internal revenue allotment and net lending – and special purpose funds will account for another P1.35 trillion or 32.8 percent of the budget.

This leaves a fiscal space of P911.7 billion to cover expanded and new programs and projects under Tier 2.

In line with the Duterte administration’s priorities, the DBM is proposing to earmark P1.044 trillion for infrastructure development in 2020, based on the medium term infrastructure investment program. This is equivalent to 4.9 percent of the country’s gross domestic product (GDP).

The government will also be including allocations for new programs, including the implementation of the Universal Health Care Act, Bangsamoro Organic Law and the Rice Tariffication Act, the institutionalization of the Pantawid Pamilyang Pilipino Program, and the establishment of the Department of Human Settlements and Urban Development.

The DBM also mentioned other priority programs, such as the K to 12 program and tech-voc program, the implementation of the Universal Access to Quality Tertiary Education Act and the Unconditional Transfer Program, the improvement in the country’s Risk Resiliency Program, and Coastal Resource Management.

In line with the cash-based budgeting system, the DBM reminded agencies that they should only propose Tier 2 projects that are implementation-ready

“With the continuing shift to cash budgeting, the Tier 2 proposals shall be limited to the programs/ activities / projects or goods and services that are to be delivered and paid within the year. Accordingly, the intended appropriations for these proposals shall only pertain to the cash requirements to be fully disbursed within the fiscal year, including their impact to the two out-years,” the agency said.

For 2020, the interagency Development Budget Coordination Committee (DBCC) approved a disbursement program of P4.21 trillion, equivalent to 19.9 percent of GDP. This is also 11.3 percent higher than the  P3.78 trillion set for this year. 

Of the total amount, the DBM said P343.4 billion is set aside for the payment of prior years’ obligations, comprising largely of 2019 obligations that will only be paid in 2020, following the transitional two-year implementation of infrastructure outlays this year.