Perspective from the House: Mitigating the Risks of a Reenacted Budget for Fiscal Year 2025

Genaro Padel
Liza Mijares
Maria Josefa Abengoza
Junar Tamayo
Maria Romina Gadon

House of Representatives
Appropriations and Finance – Managers Track
Course on Risk Management in Public Finance
2024

Abstract

Recognizing the importance of the national budget as a tool that enables the government to achieve its development agenda, the 1987 Constitution provides that should Congress fail to pass the General Appropriations Bill, government agencies shall operate based on the previous year’s budget until the enactment of a new General Appropriations Act (GAA).

Instances of budget reenactment in the Philippines trigger fiscal risks such as economic slowdown due to underspending and delay in implementing major programs. Unable to fully execute its programs and projects, the delay in the budget’s passage may hinder programs for social services and affect job creation and poverty reduction efforts. It will also stall existing projects and stop the implementation of new big-ticket infrastructure projects. For the fiscal year 2025, the delayed enactment could mean no budgetary provisions for midterm elections.

Hence, this paper posits that it is necessary to avoid the risk through the settlement of the disagreeing provisions of the budget, issuance of spending guidelines for the utilization of the previous year’s budget, addressing the roadblocks in the implementation of big-ticket infrastructure projects, and enacting a supplemental budget to cover expenditures existing GAA cannot fund.