President Rodrigo Roa Duterte signed and approved the Fiscal Year (FY) 2021 General Appropriations Act (GAA) on December 28, 2020 which included his Veto Message on specific items and provisions to the said GAA. This is to ensure the judicious implementation of the FY 2021 budget which is crafted to help the country reset, rebound, and recover from the COVID-19 pandemic.
FY 2021 GAA Provisions subject to Direct Veto
In the President’s Veto Message, provisions which do not relate to particular appropriations, of which would effectively amend the Constitution, or any existing laws were subjected to direct veto. Specifically, the President directly vetoed any provision which allows agencies to use their income without separate legal bases since these provisions will reduce the sources of financing for next year’s budget as well as increase the appropriations of agencies beyond the approved expenditure levels.
Moreover, the President directly vetoed any provision on the use of savings by an agency or department without his approval since the Constitution limits such power to the President with respect to the Executive department.
The President also directly vetoed any provision which exempts from, and defers, respectively, the application of the cash budgeting system to programs, projects and activities in line with its adoption beginning FY 2019 pursuant to Executive Order No. 91, s. 2019.
FY 2021 GAA Provisions subject to Conditional Implementation
After thorough evaluation, the President also subjected the implementation of several provisions under the FY 2021 GAA to specific conditions. This is to ensure efficient use of public funds and avoid funding duplication in the use of infrastructure-related expenses, the implementation of financial assistance to local government units (LGUs), the implementation of rice subsidy, and the prompt release and utilization of the National Disaster Risk Reduction and Management Fund, among many others.
Moreover, the following provisions will be under the observance of applicable laws, policies, rules and regulations: (1) procurement-related provisions; (2) grant of allowances and benefits; (3) utilization of the Quick Response Fund; (4) identification of program beneficiaries; (5) construction of evacuation centers; (6) resettlement of project-affected persons; (7) augmentation of capital outlays for hospitals under the Department of Health; (8) implementation of service contracting; (9) funding for foreign-assisted projects; (10) unprogrammed appropriations; (11) implementation of the national identification system; (12) funding for participation in international competition; (13) national internal revenue taxes and import duties; (14) proceeds from exploration, development and exploitation of energy resources; and (15) review of national government subsidies to LGUs.
To promote proper and transparent management and expenditure of public funds, the President also placed Congress of the Philippines, Special Provision No. 6 on “Availability of Appropriations and Cash Allocations”, as the President pushed for the fiscal responsibility, as shared with Congress, in the use and disbursement of funds for its specified purpose and within the validity of the appropriations as authorized in RA No. 11518.
FY 2021 GAA New Provisions
Meanwhile, in line with the President’s mandate to implement the GAA, new budgetary items introduced by Congress in the FY 2021 GAA will be subject to the following: (1) National Government’s cash programming; (2) observance of prudent and responsible fiscal management; (3) applicable budget execution rules and regulations; and (4) approval by the President based on the programmed priorities of the government. This includes requiring the submission to the DBM of revised agency performance targets, among other supporting documents, as may be applicable, given the effect of these new provisions on the respective outputs and outcomes of agencies concerned.
Finally, the President clarified his standpoint on how provisions will be interpreted and implemented to ensure uniform understanding and application of these provisions. Thus, general observations were included for provisions on: (1) organizational structure of the Congress and other constitutional offices; (2) enrollment of foreign students to State Universities and Colleges; (3) submission of the list and plan of Basic Education Facilities; and (4) use of the Quick Response Fund.
The national government remains steadfast in helping the country bounce back from the adverse effects of the COVID-19 pandemic through the efficient use of the PhP4.506 trillion national budget for FY 2021. As the country’s heftiest stimulus package for the economy, the FY 2021 GAA will continue the current efforts of the government in addressing the impact of the pandemic as well as serve as the country’s blueprint for economic recovery.
For further details, the President’s Veto Message on the FY 2021 GAA is uploaded on the DBM website which can be accessed through this link: https://www.dbm.gov.ph/
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