Are we now getting into a situation where we are now risking all for a [poorly planned] goal?
Kung ang damgo naghinubra ra sa kadako, kung mapakyas, ang kapakyasan maghinubra usab sa kadako!
Economic managers seek Duterte's help in lowering LGU share
By Camille Elemia, Rappler
August 08, 2018
The government finance team still has no idea where it will source the additional funds for local government units.
MANILA, Philippines – Government economic managers, fearing a gaping budget deficit, are running to President Rodrigo Duterte for help to lower the Internal Revenue Allotment (IRA) of local goverment units.
The recent decision handed down by the Supreme Court that the “just share” of LGUs shall be sourced from “all national taxes and not only national internal revenue taxes” is causing the anxiety of the Duterte administration financial team.
Budget Secretary Benjamin Diokno said this on Wednesday, August 8, during the second day of the budget briefing at the Senate.
Responding to a question by Minority Leader Senator Franklin Drilon, Diokno said they would appeal the SC decision.
Diokno said this development would "constrain" the national budget and may lead to an "unmanageable public sector deficit" of 6%.
Under the proposed 2019 national budget, which did not consider the High Court ruling, the IRA amounted to P575.52 billion.
The IRA could increase to as much as P732 billion should the SC decide that the ruling must be implemented next year.
Challenges: Both Diokno and Finance Secretary Carlos Dominguez told senators they do not know where they would source the additional funds for LGUs.
“I really don't know where we will source the funds and we will put our heads together and try to find out,” Dominguez said.
Drilon then asked about their timetable, saying the Senate has to deliberate on the 2019 budget by November for it to be implemented starting January 1, 2019. The economic managers, however, could not give a definitive answer.
“First we will file a motion for reconsideration, and we’ll wait for that to be decided upon,” Diokno said.
But Drilon said the prudent way is to expect the High Court to stick with its decision.
“Is it not more reasonable to assume that the decision will not substantially change? Do not entertain the thought that the SC will reverse its decision,” Drilon said.
“I don't think Secretary Diokno that it would be difficult for you to assume there will be no substantial changes. The more prudent step to take, minimum exposure, work on this figure, so when the appropriate time comes, we can do so [the adjustment]. It’s very difficult to me. It’s not prudent to say the SC may reverse the decision. For all my experiences, that will not happen, Mr Secretary,” he added.
Only fallback: It seems that the economic team has only Duterte as its main backup.
Citing the Local Government Code of 1991, Diokno said the President can reduce IRA for LGUs in the event of an “unmanageable public deficit,” such as the scenario the economic team foresees after the SC ruling.
Senators Drilon and Francis Escudero, however, were not convinced with Diokno's idea. Should the government announce public deficit, Escudero said it would “wreak havoc” on the country’s other finances.
Dominguez denied it would reach such grim scenario. But Escudero did not buy it: That's how they will react, really?
“Yes, we’re not allowing unmanageable deficit,” Dominguez said.
Drilon, in disbelief, said: "I think what they’re trying to say is by declaring unmanageable public defict, and declare IRA will be adjusted [to lower it], the unmanageable is now manageable.”
In a July 4 ruling, the SC decided on a 6-year-old petition filed by then representative now Batangas Governor Hermilando Mandanas. The petition said the national government did not release P500 billion worth of LGUs' "just share" from national taxes from 1992 to 2012.
Mandanas had asked the government to adjust its proposed 2019 budget based on the ruling.
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Not enough funds for Bangsamoro block grant in proposed 2019 budget
By Camille Elemia, Rappler
August 08, 2018
Budget Secretary Benjamin Diokno says they can submit a supplemental budget to finance the mandated annual block grant estimated at around P60 billion.
MANILA, Philippines – The Department of Budget and Management (DBM) on Wednesday, August 8, admitted there are not enough funds for the Bangsamoro block grant in the proposed 2019 budget.
Upon the questioning of Senate Minority Leader Franklin Drilon, the DBM said the financial implications of the recently signed Bangsamoro Organic Law (BOL) have yet to be included in the proposed allocation for next year.
Drilon pointed out that the law provides for an annual block grant, or a 5% share in the national internal revenue. This shall be automatically appropriated to the Bangsamoro region without any conditions.
DBM Undersecretary Janet Abuel said the proposed budget has a P32.2-billion allocation for the Autonomous Region in Muslim Mindanao, which the BOL will replace after a plebiscite.
“Sir, indeed it is not yet incorporated in the 2019 proposed budget. But we have a proposed budget for ARMM, which amounts to P32.2 billion and we can be able to reallocate that considering computations for the requirements under the BOL,” Abuel said.
Drilon asked if this would be adjusted, as the mandated block grant is estimated at around P60 billion.
“What we intend to do is study and try to adjust within the amounts. We need to reallocate because what we have now is indeed insufficient to cover the estimated amount of block grant,” Abuel said.
Budget Secretary Benjamin Diokno, for his part, said this would be “manageable,” as the DBM could submit a supplemental budget for the Bangsamoro region.
“That's more manageable. We can submit a supplemental budget like we did in the free tuition [law] – we can do that. We'll look for some money inside [the budget to realign],” Diokno said.
President Rodrigo Duterte had actively pushed for the passage of the BOL this year. It remains unclear why it was not considered in the preparation of the 2019 budget.
Duterte signed the landmark measure on July 26. The BOL has to win the plebiscite before it gets to be implemented.
The Commission on Elections would need an estimated P854 million for the plebiscite, which Comelec chairman Sheriff Abas said would likely happen in December this year or early January 2019.
Chief Peace Adviser Jesus Dureza, for his part, said the plebiscite would be held in either November or December. This is in conformity with the law's provisions that a plebiscite must be held not earlier than 90 days and not later than 150 days after the effectivity of the law.
