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Malacanang has stood firm with its cash-based budgeting as it questioned the motive of the House of Representatives for allegedly taking hostage the proposed 2019 budget.

In a press briefing, Presidential Spokesperson Harry Roque said the Palace was not only "shocked" and "curious" for the House action under the leadership of Speaker Gloria Macapagal-Arroyo, but it was also "alarmed" for suspending the budget hearing, just to return to obligation-based budgeting.

"For the past two years, the Palace has no problem with the budget; although during the past two years I was there in Congress as deputy minority leader. I was the noisiest in the budget hearing...the rest of the administration congressmen were in full support of the budget," he said.

But now, he said it seemed that the situation was upside down where the minority is now in power at the House of Representatives.

"And I realize these are very harsh words. But its harsh words intended to deliver the message that we are completely shocked at the resistance of the House, because we were confident that when there was a change of leadership, we would still deal with very close allies," Roque said.

The House is now under the leadership of Arroyo, a former president. She was nominated as the Speaker following the controversial ouster of Davao del Norte Rep. Pantaleon Alvarez, a PDP-Laban partymate of President Rodrigo Duterte, on July 23.

In a television interview earlier in the day, Roque said the Palace was expecting the usual cooperation by the House under Arroyo, an "equally strong ally" of the administration.

He also noted Davao City Rep. Karlo Nograles, chairman of the House committee on appropriations, has not been replaced with the change of leadership in the House and he has been an administration ally.

"So we're quite frankly surprised at this recent development. It's as if the House is saying, with new leadership, 'the Palace better watch out because it won't be as easy as it was in the past.' I'm not quite sure that this really is the message that the House wants to send. But you can’t blame Malacanang for perceiving matters as they are in the sense," Roque added.

Nograles has said congressmen have crossed party line because they agree "that cash-based budgeting is not feasible, impracticable, and inimical to the interests of our constituents.”

He added budget hearings would only resume once the Department of Budget and Management and the interagency Development Budget Coordinating Committee would return to obligation-based budgeting.

Budget Secretary Benjamin Diokno has explained that with cash-based budgeting, underspending could be reduced as the government agencies have to immediately implement their respective programs and projects within one year, otherwise, the fund would revert to the National Treasury.

Under the obligation-based budgeting, while the funds have already been obligated, as what has been the practice in the previous years, it has been taking years before the projects could actually be implemented and completed.

The Department of Budget and Management (DBM) has started to implement the cash-based budgeting in the 2018 budget. But it is only for the proposed P3.757 trillion budget for next year that the administration really wants to fully institute the cash-based budgeting.

Roque said Malacanang would not give in to what the House wants as it is ready to operate under a reenacted budget.

"The ball is in the hands of our allies in Congress. But we are not blinking; we are not scared of a reenacted budget," he said.

He also warned the lawmakers they could lose their pet projects under a reenacted budget.

"And the congressmen better ask themselves what will happen to pet projects, because under reenacted budget, it is Malacanang that will determine which budgets will be implemented. I don’t think they want that," the spokesman said, adding that it would be the congressmen and their constituents who would suffer.

He noted when the proposed 2019 budget was prepared, there were also inputs from the Regional Development Councils of the pet projects of the lawmakers.

He said with a reenacted budget, cash-based budgeting would still be followed as it is implemented in the 2018 budget and this would not also affect the government's "build, build, build" infrastructure projects.

Roque also assured that even if the budget would be reenacted, there would be no corruption.

However, he raised the concern of Diokno that if the proposed budget would not be be passed, this could affect the country's credit rating.

"Secretary Diokno just informed me on the phone that in the US, whenever the Executive and Congress are not able to agree on the annual budget, the country’s credit rating goes down. So right now, we have rosy credit rating. We’re the favorite as far as credit agencies are concerned. And I would hope that this recent change in leadership in the House will not necessarily translate into a more righteous relationship with the House as far as the budget is concerned," he said. Celerina Monte/DMS