Aquino can move funds ala-DAP in redefined ‘savings’

MANILA — Congress has granted President Benigno Aquino III the power to move funds around in the same way he did with the Disbursement Acceleration Program (DAP), after the Senate retained the Palace-initiated redefinition of the term “savings” in the 2015 national budget, former national treasurer Leonor Magtoils-Briones said Friday.

She added that this redefinition could perpetuate the pork barrel system and other programs similar to DAP, both of which were declared unconstitutional by the Supreme Court.

In two weeks, contingents from the House of Representatives and the Senate will meet in a bicameral conference to reconcile the two versions of the national budget—including differences in the way “savings” is defined. The House allows President Aquino to impound funds and declare these as savings by mid-year; the Senat allows him to do this “at any time” throughout the year.

House Speaker Feliciano Belmonte Jr. defended the House version while Senator Francis Escudero, chairman of the Senate committee on finance, said the Senate had complied with the Supreme Court ruling with strict conditions and safeguards in place to guard against abuses.

Belmonte, however, said the House version to declare savings by mid-year was better than the Senate’s “at anytime.”

“But we all agree in the House and the Senate that we should not wait for end of the year to declare savings. It is just simple business sense and common sense. We cannot allow funds lying around idle for so long and force us to contract loans with interest because we have to wait till December,” Belmonte said.

Escudero said the President could start declaring impound funds as savings as early as January because some projects, such as those being done by the Public Works Department were being bid out the year before the budget’s implementation.

“Most of the infrastructure projects were being bid out by the DPWH. By January, these contracts will be awarded and by the time, we have an idea already how much savings had been generated from the result of the bidding. We would know there are savings because the bid price is always lower than the contract price. So why wait till December to tap these extra funds,” Escudero said.

During the approval of the budget on third and final reading, Briones said Escudero defined savings in the P 2.606-trillion Senate approved budget as the “portions or balances of any released appropriations in the GAA or General Appropriations Act which have not been obligated, whereas the House-approved bill does not require that the funds be released to be declared as savings, only that such funds have not been obligated.”

“However, this does not reclaim the Congress’ vaunted power of the purse as savings can still be declared by the Executive at virtually any time of the year, as long as the funds have been released in appropriations,” Briones said.

Briones said Section 68 (b) of the Amendments to General Provisions also states that savings can result from the “discontinuance or abandonment of an ongoing program, activity or project by the head of the agency concerned due to causes not attributable to the fault or negligence of the agency concerned which would not render it possible for the agency to implement said program, activity or project, at any time during the validity of the appropriations.”

“The issue of when to declare savings is an important question we should be asking. With the budget approved by both houses of Congress, the budget will still be primarily under the control of the Executive. If the Executive chooses to, it can declare savings from released appropriations and use it to fund DAP-like projects,” said Briones, lead convener of Social Watch Philippines.

Escudero, however, insisted that the Senate complied with the Supreme Court ruling on the DAP through a new general provision on the “Meaning of Augmentation” in Sec. 69, “which states that savings cannot be used to augment a non-existent programs, activities or projects through the use of an appropriation not otherwise authorized in the subject General Appropriations Act.”

However, Briones said, the provision does not address Executive’s extensive clout over the budget and offers no clarity over the time frame of the declaration of savings.

“This cuts across issues of transparency, accountability and the balance of powers among the three branches of government,” she said.

“We challenge both the government to retain the proper definition of savings, and we challenge the public to engage this issue further. We’ve said this time and again, that it is our money and that it should go where it ought to,” Briones said.

“We should not expect the government to act without us acting for our own interests,” she added.

Bagong Alyansang Makabayan secretary general Renato Reyes Jr. shared Briones’ views saying that the proposed national budget “really gives the President discretion over government funds despite the safeguards put in place by lawmakers.”

Reyes said the safeguards put in place by the Senate would not cure the problems posed by “presidential pork” and the new definition of savings.

Reyes said he was wary of the bicameral conference committee as it remains uncertain which version will be adopted in the final bill.

Reyes demanded that the bicameral conference committee hearings be opened to the public.

He said it was during bicameral hearings that “midnight insertions” were being made considering that Congress was rushing the passage of the national budget with only nine session days remaining before Congress goes on a Christmas break on Dec. 18.

While Escudero acknowledged the presence of lump sum items in the budget, he said these were different from pork barrel.

He said these items were really necessary and give the government the necessary flexibility.

“But these lump sums were made temporary only. Why temporary? Because we require them, just very much like what we did in 2014, to submit a special budget in accordance with the Revised Administrative Code.”

He said the Supreme Court did not declare lump sum funds as unconstitutional, but the post-passage intervention of legislators.

In the Senate’s budget version, total lump sum items amount to P1.862 trillion—or 70 percent of the entire P2.6 trillion spending plan. Total programmed appropriations come to P1.734 trillion, and total unprogrammed allocations are P123.056 billion.

Lump sum appropriations under the Programmed Funds include Contingency Fund or standby fund for unforeseen events, P2 billion; Rehabilitation and Reconstruction Program to complement the expenses based on the recommendation of the Office of the Presidential Assistant for Rehabilitation and Recovery, P20 billion; E-Government Fund for interconnectivity and ICT requirements of all government agencies, P1 billion; and International Committees Fund, P10.7 billion.

It also includes P90.4 billion for the Miscellaneous Personnel Benefits Fund or MPBF, which covers the benefits of government workers; P14 billion for National Disaster Risk Reduction and Management Fund; and P127.1 billion for the Pension and Gratuity Fund to cover the standby fund for those retiring from government service.

Among the items under the Unprogrammed Funds are the Armed Forces Modernization, Additional Subsidy to the National Power Corp., the proposed supplemental budget for the Rehabilitation Fund amounting to P20 billion, P9 billion for the MRT3 acquisition, and P3 billion for the Trade Remedies Fund.

Escudero said the Unprogrammed Funds can be funded only when state revenues exceed the target for the fiscal year.

“It is a standby authority on the part of the Executive to spend money only when there is excess in the revenue collection.”

In accordance with the Supreme Court’s DAP decision, the National Treasury should first issue a certification that there was indeed an excess and the funds are in the Treasury.

“In accordance with our provisions on lump sums, they should advise us first before using the funds,” Escudero said.

Also on Friday, Briones questioned the Palace’s “last-minute spending” amounting to P23 billion that needs to be used up in a month.

Briones said the short period within which the Palace wanted the money disbursed makes the allocation vulnerable to corruption and political patronage.

She urged the Palace to disclose the details of the P23 billion in lump sum appropriations and justify the urgency for spending the amount in one month or all of December this year.