Press Releases

On budget accountability bill

April 21st, 2021

Salceda files budget accountability bill, wants stronger public financial management; House tax chief says revenue-losing bills should have a compensating revenue source

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district), who also acts as Vice Chairperson of the House Committee on Appropriations, has filed House Bill No. 9214 or the Budget Modernization Bill, a priority of the economic managers of the Duterte administration.

Salceda’s bill, which is the administration’s version of the reform, sets the ground rules for the use and allocation of government funds and the national budget, and institutionalizes public participation and transparency in budgeting.

“This was a reform I started when I was Chair of the Committee on Appropriations from 2006 to 2007, and when I was a freshman congressman in 1998, with the Subsidy Council Act, part of which has now been passed as CREATE,” Salceda said.

Salceda’s bill clarifies the processes and regulations for budget preparation, management, and reporting, and also introduces a rule that all congressional proposals that will erode government revenues, such as tax breaks, should have a corresponding revenue source identified.

The bill also institutionalizes the Budget Priorities Framework to ensure that the national budget is allocated towards clear national priorities.

“As the most important guiding document of national policy for the year, the budget must be prepared, discussed, and enforced in a manner that upholds national interest and the Constitution. It must be prepared and implemented with a view towards national objectives for the year,” Salceda said.

“The budget process traditionally has three key stages: the budget preparation, the management of the fiscal resources the budget authorizes, and the reporting and evaluation of how the budget was spent. In each stage the ground rules have to be in place to ensure that there is no confusion among all stakeholders and implementers of the budget,” Salceda added.

Salceda also says that, “with the administration’s push for people-centered budgeting, we are introducing a fourth key component, on accountability and people’s participation in the budget process.”

Key reforms in the budget

The reforms introduced in the primarily aim to ensure that public resources are allocated in a manner that aligns with national priorities.

Since 2013, the Philippine government has prepared a “Budget Priorities Framework” that has been regarded by international organizations like the United Nations Development Programme (UNDP) as an international best-practice for budgeting. Salceda’s bill proposes to institutionalize this practice into law.

The bill also institutionalizes medium-term planning, particularly in infrastructure, to ensure that projects that are initiated during one budget year are carried out to completion. The bill also introduces filters on multi-year contracts to ensure that only such contracts that the government can fully meet will be initiated.

“The rule on contingent liabilities is important. Congress determines the budget, but many liabilities we incur are not in the budget. This is due to some contracts that the government enters without Congressional approval that impose liabilities on the government. We will limit such liabilities,” Salceda said.

Budget participation and accountability

The proposal also institutionalizes budget participation and accountability measures that are in place or are already being considered by the government.

One important reform is the requirement that all proposed revenue eroding and expenditure bills include a Financial and Budgetary Information Sheet upon filing of the bill. The said information sheet shall contain an estimate of the financial and budgetary implications of said proposal for the initial year of implementation.

Public access to information on the budget, and public participation in the budget process are also institutionalized in the proposal.

“There is urgent need for a framework that clarifies the management of public resources, especially in view of the pressures our public resources face during and in the aftermath of the COVID-19 pandemic,” Salceda said.

“We can’t afford to waste public money during this difficult time. We need to manage the budget as well as we could,” Salceda concluded.

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