The Committee on Appropriations of the House of Representatives formally endorsed for congressional approval on Thursday the proposed P18.68-billion budget of the Department of Finance (DOF) under the new cash-based system in which the implementation of projects and the procurement of goods and services are done within the given fiscal year.
Finance Secretary Carlos Dominguez III said the DOF budget for 2019 is 3 percent or P630 million lower than the appropriation for the current year of P19.31 billion.
Albay Rep. Jose Ma. Clemente Salceda, who is a senior vice chairman of the appropriations panel, sponsored the approval of the DOF budget before the House plenary on Thursday night. The period of interpellation on the DOF budget ended after about two hours.
Representatives Antonio Tinio (ACT-Teachers), Mark Go (Baguio City), Ariel Casilao (ANAKPAWIS) and Minority Leader Danilo Suarez, in succession, interpellated Salceda as the sponsor of the DOF budget during the plenary deliberations of House Bill No. 8169 or the proposed P3.757 trillion General Appropriations Act for 2019.
“As in this year’s budget, the DOF has voluntarily submitted a lower allocation under the proposed GAA (General Appropriations Act) for 2019 to set an example for other departments to operate efficiently,” Dominguez said. “Next year’s budget for the DOF is also moored to the new cash-based budgeting system of the Duterte administration that is designed to improve the absorptive capacity of all government agencies.”
The DOF’s 2018 budget is lower than its 2017 budget of P21.5 billion.
For the DOF’s proposed 2019 outlay, the Bureau of the Treasury (BTr) got the biggest increase to P6.05 billion, up 39 percent from the current fiscal year’s P4.36 billion, while those for the other agencies mostly declined.
The P18.68-billion DOF budget for 2019 excludes the budgetary support for government-owned and controlled corporations (GOCCs) at P36.60 billion; automatic appropriations of P1.37 billion for the Department’s retirement and life insurance premiums, and special accounts in the General Fund for several programs of its attached agencies—the Bureau of Customs (BOC) and Insurance Commission (IC); and unprogrammed appropriations of P210 million, which is for the refund of the service development fee for the Philippines’ Nampedai property in Japan.
Dominguez said budgetary support for GOCCs includes the allocation for the unconditional cash transfers (UCT) for the poorest households as part of the social mitigation measures under the first tax reform package, and the P114 million for the operational expenses of the country’s first-ever Philippine Tax Academy (PTA).
He said the BTr’s budget will rise in 2019 because of the need to pay the insurance premium of government assets against natural or human-induced calamities, epidemics, crises and catastrophes as provided under Republic Act No. 656 establishing the Property Insurance Fund.
The largest allocation, however, is in the budget of the Bureau of Internal Revenue (BIR) at P8.1 billion, which represents a mere 1 percent increase from the current year’s budget. The slight rise in the BIR budget is largely attributed to the 12 percent hike in personnel services and the 65 percent increase in capital outlay.
Personnel services, which account for P4.93 billion in the BIR’s 2019 budget, includes the payment of salaries and benefits for filled-up positions from 10,044 in 2018 to 10,671 in 2019, as well as the increase in salaries and benefits of personnel due to the implementation of the Salary Standardization Law’s (SSL) fourth and final tranche.
The lease and construction of new BIR offices and the expansion of its information and communications technology (ICT) projects resulted in a 65 percent increase in the agency’s capital outlay for 2019.
Other DOF-attached agencies such as the Privatization and Management Office (PMO) also got allocation increases from P76.01 million in 2018 to P83.05 million in 2019; National Tax Research Center (NTRC) from P57.43 million to P66.11 million; Central Board of Assessment Appeals (CBAA) from P18.63 million to P20.66 million. The increases are mostly because of the SSL.
The budget of the Office of the Secretary (OSEC) dropped from P1.23 billion in 2018 to P843.33 million in 2019, along with the Bureau of Customs (BOC) from P4.59 billion to P2.61 billion; Securities and Exchange Commission (SEC) from P629.87 million to P618 million; and Bureau of Local Government Finance (BLGF) from P305.12 million to P269.03 million.
Completion of projects in the OSEC and the BOC led to the decrease in their respective budgets, but the latter has P356.8 million for capital outlays for the procurement of ICT equipment, along with funding for its Customs Automation Project and Automated Backup Solutions for its databases.
The cut in the SEC’s budget was because of its low absorptive capacity, while the BLGF’s budget decreased because one of its key programs—the revised Information Systems Strategic Plan (ISSP)–has yet to be approved.
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