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Commentary

Red flags in the proposed national budget

12:04 AM August 30, 2016

OLD HABITS die hard, as the saying goes. This seems to be the case in the proposed P3.35-trillion national budget for 2017, on which the House of Representatives began deliberating on Aug. 22. Huge lump sums, pork projects, and questionable provisions remain present in the proposed budget, inducing feelings of déjà vu among antipork crusaders.

At the presentation to legislators by President Duterte’s economic managers, Budget Secretary Benjamin Diokno described the 2017 budget—the first under this administration—as “transparent and participatory.” But early on in the deliberations, familiar red flags are unfurling.

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The most glaring among these is the presence of up to P1.4 trillion in lump sums in programmed and unprogrammed “special purpose funds” (SPFs) and automatic appropriations. The budget department defines SPFs as “appropriations provided to cover expenditures for specific purposes for which recipient agencies/departments have not yet been identified during the budget preparation.”

Many items under the SPFs will enjoy huge bumps, including the budget for the contingent fund, which will increase by 120 percent from the current P2.5 billion to P5.5 billion, and the allocation to local government units, which will receive a P69-billion bump from P485.8 billion to P554.9 billion.

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Lump sums have long been criticized by public finance pundits for lack of specific details in the manner in which these funds will be spent, giving the executive branch a wide latitude of discretion on their utilization, and consequently making them highly vulnerable to corruption and political maneuvering. Even the so-called “automatic appropriations,” which include debt service requirements, also raise questions as these lump-sum funds do not undergo congressional scrutiny.

In the past years, budget secretaries have explained that lump sums are needed to provide flexibility in the execution of the budget, especially when it comes to emergency funds needed in times of disaster. However, allotting more than a third of the national budget for lump-sum funds undermines the much-needed accountability on the use of public funds.

Apart from the lump sums, Secretary Diokno’s refusal during the budget hearing to provide a list of “pork projects” or projects proposed by legislators during the budget-preparation stage was unfortunate. After all, he had earlier announced that legislators are free to propose pet projects to government agencies, as long as this is done before the enactment of the budget.

“I think I can say this with authority. I’m the oldest here, I’ve seen this budget before martial law. It’s been a practice—legislators will go to the department secretaries and ask for the budget,” Secretary Diokno said when the issue of pork barrel was again raised in the hearing.

With this line of reasoning, it is clear that the national government is not keen on putting any restraint on what amounts to a continuing pork barrel system. Secretary Diokno is, in fact, using technicalities to cover up the fact that the system of patronage largely remains in place, albeit under a thin legal cover.

Another worrying aspect of the proposed 2017 budget lies in the fine print. In President Duterte’s 2017 budget message, he explicitly said that the “provisions of this budget are compliant with the Supreme Court’s landmark decisions on the Priority Development Assistance Fund and the Disbursement Acceleration Program.”

But a cursory reading of the budget’s general provisions will reveal provisions on the use of savings and budget augmentation similar to those in previous budget bills. Past budgets were heavily criticized for containing provisions that essentially “legalize” mechanisms for the haphazard “fund juggling” akin to the controversial DAP.

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Section 59 of the General Provisions, for example, specifies mechanisms to “modify allotments” under “exceptional circumstances”—a vague term that essentially empowers the executive branch to change details in the budget long after Congress approves the annual appropriations law.

When these points were raised in the congressional hearing, a visibly irked Secretary Diokno told legislators: “If you see any provision that is inconsistent with the Supreme Court decision, call my attention or [remove] it yourself, and we will allow it.”

If he truly wants to abide by the Supreme Court’s decision on the PDAF and DAP, why include such questionable provisions, and then tell legislators afterward that they are free to remove them?

We are still in the early stages of the budget deliberations, and more controversies and questionable allotments will surely be uncovered in the next few weeks. What is glaring at this point is that the same red flags in previous budgets remain intact, making us question the authenticity of the claim that this is “a budget for real change.”

 

Marjohara Tucay is the national president of Kabataan Party-list. He serves as adviser of the seven-member Makabayan bloc in Congress on the national budget.

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