No budget for 2019… yet

PHILIPPINES - In Brief 04 Jan 2019 by Romeo Bernardo

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2018 ended with congress failing to pass the executive’s proposed 2019 national budget, the result of an apparent spat between the two co-equal branches of government. The disagreement started back in mid-2018 on the technical issue of the executive’s proposed “cash” vs. previous years’ “obligation” budget,[1] but has since turned political with the budget document apparently caught in a power struggle between the economic managers and the leadership of the lower house. The spat went on full display during a “Question Hour” in December when the budget secretary, Benjamin Diokno, was invited to congress to explain the proposed budget, only for the questions to turn personal with members of congress insinuating that the secretary is involved in corrupt practices, something that he categorically denied. Secretary Diokno claims that members of congress’s antagonistic stance may be a diversionary tactic, following questions raised about their amendments to the budget, or perhaps related to the economic managers’ decision not to release funds under an off-budget “road user’s tax” account, pending legislation to place the funds on-budget[2]. Unlike in the U.S. where congress’s failure to pass a budget means that government shuts down, the Philippine Constitution provides for a re-enacted budget, meaning that government continues to operate based on the previous year’s budget. This has happened repeatedly during the presidency of now speaker Gloria Arroyo which, given lack of clarity in budget rules at that time, gave the President enormous power to re-align spending priorities in a non-transparent way. Following a later Supreme Court decision checking the practice, the lack o...