Photo from the House of Representatives website

VERA FILES FACT CHECK: Nograles wrong on cash-based budget

Davao City 1st District Rep. Karlo Nograles made a false claim about the cash-based budget system.

STATEMENT

Nograles, chair of the House appropriations committee, told reporters Aug. 9 the Philippines needs “practice” and a “transition” phase, and is not ready for the proposed budget system:

Maganda yung konsepto, pero ang tanong kasi, masyado bang bigla ang pag- ang pag-shift natin to cash-based na wala man lamang practice or wala man lamang transition? (The concept is good, but the question is, is it too soon to shift to cash-based system without any practice or transition?)”

Sources: Audio recording of interview with Rep. Karlo Nograles, House of Representatives, Aug. 9, 2018, listen from 7:15 to 7:34; Rappler video, listen from 7:16 to 7:35

FACT

Contrary to Nograles’ claim, the Philippines has already been implementing a key feature of the cash-based budget system for two years.

President Rodrigo Duterte in his veto message on the 2017 national budget ordered that publicly-funded projects be obligated by year end. The rule was carried over in the 2018 budget.

A one-year project implementation period is a key feature of a cash-based system, in contrast with a two-year obligations-based system.

The 2018 budget “will still be obligation-based,” noted the Department of Budget and Management, but added that agencies are recommended to implement “as if it is a cash-based budget.”

Adopting the cash-based system is a “logical progression from limiting the validity of the budget in 2017 and 2018 from two years to just one year,” the DBM said.

Budget Secretary Benjamin Diokno in a press release said a cash-based system would “speed up the implementation and completion of priority projects of the government.”

Both chambers of Congress suspended budget hearings due to opposition to the cash-based system.


Sources:

Department of Budget and Management, Reforming the Philippine Budgeting System.

Department of Budget and Management, Shifting to Annual Cash-Based Appropriations in FY 2019, Jan. 17, 2018.

Department of Budget and Management, President Duterte to submit first cash-based budget to Congress.

Department of Budget and Management, President’s Veto Message Fiscal Year 2017, page 658, III A.

Department of Budget and Management, General Provisions Fiscal Year 2018, page 632, Sec. 61.

Early Edition on ANC, Karlo Nograles: On the budget reform bill, March 22, 2018.

House of Representatives, House Bill 7302.


(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)


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