Pending the Congressional approval of the 2019 General Appropriations Bill, the national budget for fiscal year 2018 is deemed reenacted as mandated by Section 25 (7), Article VI of the Constitution. The reenacted budget shall remain in force until such time that the GAB is passed into law by Congress.
“In light of recent developments, the Department of Budget and Management (DBM) has released Circular Letter No. 2019-1 guiding national government agencies and instrumentalities in operating under a reenacted budget,” said Budget Secretary Benjamin E. Diokno. “The Circular Letter covers the release of funds in the first quarter of 2019 in anticipation of the passage of the 2019 General Appropriations Act (GAA),” he added.
Pending the approval of the 2019 GAA, national government agencies receiving allotment or Notice of Cash Allocation (NCA) from the DBM are authorized to obligate the amount corresponding to their actual requirements for the first quarter of 2019, but not exceeding the following percentages, i.e.:
Chargeable Against Agency-Specific Budget
- Personnel Services (PS) - twenty-five percent (25%) of the PS level using actual salary requirements as of end-2018 but not to exceed the level provided under the 2019 National Expenditure Program (NEP). This PS level shall exclude the following:
- Built-in funds in the agency for the creation of new positions and fourth tranche compensation adjustments;
- Mid-year bonus;
- Year-end benefits and cash gift;
- Clothing and uniform allowance;
- Productivity Enhancement Incentive
- Maintenance and Other Operating Expenses (MOOE) - twenty-five percent (25%) of regular programs and ongoing foreign-assisted and locally-funded projects under the 2018 GAA and 2019 NEP, whichever has the lower amount.
- Capital Outlays (CO) - twenty-five percent (25%) of regular programs and ongoing foreign-assisted and locally-funded projects under the 2018 GAA and 2019 NEP, whichever has the lower amount.
Chargeable Against Automatic Appropriations
- Retirement and Life Insurance Premiums (RLIP) - equivalent to 12% (or the applicable rate otherwise provided under special laws) of the salaries component chargeable against agency-specific budget as mentioned in the said Circular.
Meanwhile, the DBM will issue a Special Allotment Release Order (SARO) based on the agency’s Special Budget Request on items such as:
- Charges against the Pension and Gratuity Fund, as reenacted, for the actual requirements for retired government employees and actual requirements for pension benefits of military and uniformed personnel; the amount of releases shall be based on the number of pensioners and rates as of December 31, 2018.
- Charges against other Special Purpose Funds such as Budgetary Support to Government Corporations (BSGC), Miscellaneous Personnel Benefits Funds (MPBF), Contingent Fund (CF), among others;
- Chargeable against Automatic Appropriations such as the Internal Revenue Allotment (IRA) of provinces, cities, municipalities and barangays corresponding to their requirements for the first quarter of 2019 based on the 2019 NEP.
All SAROs to be issued chargeable against the FY 2018 Budget as outlined in Circular Letter 2019 - 1 shall be valid for obligation while the 2019 GAA is not yet in effect.
“The DBM will continue to oversee the budgetary operations of the national government, especially as it runs on a reenacted budget for presumably the first quarter of 2019,” said Secretary Diokno. “We will do what we can to minimize the damage to the Philippine economy, particularly public construction. You see, as early as the first working day of the year, we have come up with the guidelines for fund releases under the reenacted budget,” he elaborated.
“The sooner the 2019 GAA is passed, the better for the economy and the Filipino people. Ramping up our investments on infrastructure and social services will only be sustainable if the budget is authorized by Congress,” he concluded.
The said circular letter may be accessed in the DBM website through the following link: https://www.dbm.gov.ph/index.
PR No. 2019-01