MANILA (UPDATE) - The Senate on Tuesday approved on final reading measures that would extend the validity of the 2020 national budget and the Bayanihan to Recover as One Act (Bayanihan 2) until next year.

The Senate unanimously agreed to pass the House of Representatives' proposals to allow the government to spend remaining funds from the current budget until December 31, 2021.

The validity of Bayanihan 2, the Philippines' second COVID-19 aid package, meanwhile, will be extended until June 30, 2021.

• Duterte seeks speedy extension of validity of 2020 budget, Bayanihan 2

President Rodrigo Duterte certified as urgent bills to extend the 2020 budget and the Bayanihan 2 until next year.

On Monday, the House of Representatives approved on final reading House Bill 6656 which gives the Duterte administration one more year to spend this year's national budget.

"The COVID-19 pandemic has disrupted our lives... government agencies were not spared and they, too, had to adjust," Senate Committee on Finance chair Sonny Angara said in plenary.

"We are opening a wider window for the country to return to its original path to development," he said.

Without the passage of the 2 bills, the 2020 national budget would expire on December 31, 2020, while Bayanihan 2 would be deemed invalid after December 19, 2020.

As of November 30, the government has yet to utilize some P110 billion under the 2020 budget, as well as about P38 billion under the Bayanihan 2, Angara said.

Under the law, all unspent government funds within their validity period will be reverted to the National Treasury, and Congress will have to craft new laws to authorize the executive department to access the funds.

• What you need to know about Bayanihan 2: PH's 2nd COVID-19 relief package

DRILON AMENDMENT

The chamber approved Senate Minority Leader Franklin Drilon's amendment to include a provision on both bills that would ban all government agencies and other public entities from "outsourcing requests or agreements" with the Philippine International Trading Corp (PITC).

"Any balances of fund transfers in the books of the PITC shall revert to the unappropriated surplus of the general fund upon the effectivity of this act," the provision read.

Drilon has repeatedly slammed the state trading firm, saying it is being used to "park" public funds to avoid it from being reverted to the national treasury.

• Drilon wants state trading firm to return P33.4 billion in 'parked' funds

Under another Drilon amendment, "balances of fund transfers between agencies, instrumentalites and government-owned and controlled corporations" that are left "remain unused, unutilized, unexpended and undisbursed" when the 2 bills expire must be returned to the national treasury.

CASH-BASED VS CONTINUING APPROPRIATIONS

Sen. Panfilo Lacson asked his colleagues if the chamber should reconsider having a cash-based budgeting system to avoid annually extending annual spending bills.

"Cash-based budgeting system is impractical," Lacson said.

"We should consider opting back to the practice of continuing appropriations instead of imposing on agencies what they almost cannot deliver anyway," he said.

Under a cash-based budgeting system, all unused funds by the end of each year have to be returned to the national treasury, and Congress needs to pass a new law to authorize the executive branch to tap the sum again.

Before the government implemented the cash-based budgeting system, agencies were spent public funds on a project-based system, allowing them to use taxpayers' money beyond the end of each year, provided that these were already allocated to specific projects.

Drilon said he preferred to stick with the current budgeting system.

"Cash-based budgeting was introduced in order to compel the bureaucracy to act on budgetary allocations," he said, noting that government spending accounts for about a fifth of the Philippines' gross domestic product.

"Delays in the execution of services would prevent the achievement of this desired and planned contribution of government expenditure to GDP," he said.

Angara said he is still confirming if House members and senators still need to convene in a bicameral conference committee to see if their counterparts from the other chamber would also accept Drilon's amendments.

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