Duterte orders cash budgeting system

MANILA - President Rodrigo Duterte has ordered the adoption of a cash budgeting system starting this year in a bid to improve the government’s financial planning.

Executive Order No. 91 signed on Sept. 9 but made public only on Thursday shifts the current obligation budgeting system to speed up government spending. The order came with less than four months left in the fiscal year.

The new system requires the implementation of an operational cash budget and requires funds and projects to be spent and executed respectively within the same fiscal year.

Under the previous system, contracts awarded within the fiscal year can be delivered even after the year ends.

Duterte’s latest order also specifies that obligations incurred by the national government within each fiscal year should be implemented during the same year, while payments for obligations incurred should be made 3 months after the end of the validity of appropriations.

Unreleased appropriations as well as unspent funds, meanwhile, should be reverted to the national treasury 3 months after each fiscal year according to the order.

“There is a need to improve the fiscal planning of government agencies through the implementation of an operational cash budget and by setting deadlines for obligation of funds and execution of projects during the fiscal year, in order to speed up the implementation of programs and to promptly deliver goods and services to our people,” the order read.

Appropriations covering financial subsidy to local government units, on the other hand, should be available for obligation and disbursement until the end of the succeeding fiscal year.

Multi-year procurement projects, or those that take more than a year of implementation, are required to secure a multi-year contractual authority from the Department of Budget and Management.

The contractual authority will cover the full project cost and will be basis for the approved project for the contract.

Read the full order below:

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