• ‘Billions in public funds hidden’

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    NOT all government expenditures are covered by the annual General Appropriations Act (GAA) because there are hundreds of “hidden” accounts in the government’s budget, which, according to former National Treasurer Leonor Briones, could be as high as 10 percent of the national budget.

    A study funded by the United States Agency for International Development (USAID) said these off-budget accounts (OBAs) are equivalent to at least five percent to as high as 10 percent of the yearly budget.

    If Briones’ estimate is applied to the proposed 2015 budget of P2.2 trillion, 10 percent would be equivalent to P220 billion, the use of which could escape public scrutiny.

    According to the USAID study, off-budget accounts, which are nowhere to be found in the General Appropriations Act (GAA), include those spent under the Presidential Social Fund of the Office of the President (OP) and National Agri-Business Corp. (Nabcor), one of the agencies tagged in the pork barrel scam.

    Besides the OP and Nabcor, there are other “major” OBAs whose appropriations do not pass the scrutiny of Congress but are audited by the Commission on Audit (COA).

    So far, only the USAID-funded Philippines National Budget Monitoring Project in 2009 touched on the sensitive OBA issue. The project was undertaken in cooperation with the Management Systems International (MSI) for the International Center for Innovation, Transformation and Excellence in Governance (INCITEGov).

    In a separate study on the Public Expenditure and Financial Accountability (PEFA) of the Philippine public financial management system, the World Bank (WB) determined that OBAs represent less than five percent of the national budget and therefore “not a major accountability concern.”

    “Nonetheless, these accounts are highly vulnerable to improper, if not illegal, acts on account of the generally non-transparent nature of their operations. To safeguard the integrity of the funds, there is a need to advocate for more transparency, efficiency and effectiveness in the operations of OBAs,” the report said.

    But Briones strongly disagreed with the WB figures, stressing that the estimates given by the study were very low.

    “I vehemently disagree with the observation attributed to the World Bank that the estimated amount of OBAs are only less than five percent of the national program of expenditures, and therefore not worthy of their attention. If we use the appropriations act as base, which is generally only one-half or even less of the total expenditure program, then you get ten percent,” Briones told The Manila Times.

    “The problem with just focusing on numbers without looking at the political and social consequences is that we are misled. Look at the pork barrel originally intended for 2014. It was ‘only P25.4 billion’ which was much less than the World Bank’s famous five percent, or probably less than one percent but look at how this ‘un-major accountability concern’ has destroyed our public finance system, our administrative culture and our societal values for decades and decades,” she pointed out.

    The “best way” to fully account for all the OBAs, Briones said, is to “examine the budget documents in close detail.”

    “For example, the remittances of Pagcor [Philippine Amusement and Gaming Corp.] to the Office of the President are in the volume on budget of expenditures and sources of financing,” Briones added.

    According to her, identifying all OBAs would be a tedious task.

    Pagcor and the Philippine Charity Sweepstakes Office (PCSO) are the principal sources of OBA for the President’s Social Fund (PSF) which, based on the USAID study, was among the four main OBA generators, the three others being Nabcor, the Municipal Development Fund and the Manila Economic and Cultural Office (MECO).

    Scrutiny
    Former Budget Secretary and University of the Philippines professor Benjamin Diokno believes that there should be a more thorough scrutiny of off-budget funds that are spent without much public attention.

    Diokno said OBAs also include the controversial Judiciary Development Fund (JDF) and Road Users Fund or Motor Vehicles Users Charge (MVUC).

    “All public funds should be subject to audit, be it the JDF, the entire budget including PDAF [priority development assistance fund]and DAP [Disbursement Acceleration Program], and even off-budget funds like Pagcor, Malampaya, PCSO, Road Users Fund and others,” he told The Times.

    “These other funds are subject to audit and they are many times bigger than the JDF,” he noted.

    Briones agreed with the former Budget chief.

    Diokno “is correct. These funds are audited, even the JDF as the Supreme Court emphasizes. Those who watch the budget only see what is in the [GAA]. It is also partly due to media, which report only the agency budgets,” she said.

    The former national treasurer also noted that the “expensive study” by the USAID failed to look into the role of OBA as a “source of pork.”

    “Take the MVUC. Congressmen who sit in the committee which determines the allocation of MVUC expenditures get at least P10 million in additional pork,” Briones pointed out. “It has a multiplier effect on the proliferation of pork.”

    The Road Tax, under Republic Act 8794 that was promulgated in 2000, is purportedly the government’s third largest source of tax revenue, after the Bureau of Internal Revenue and the Bureau of Customs.

    The Road Tax fund, which reaches nearly P10 billion annually, comes from annual registration fees paid by vehicle owners to the Land Transportation Office, which remits the fund to the Bureau of Treasury.

    Like a real OBA, the Road Users fund is not mixed with other funds. Instead, it is deposited under four different Special Accounts — the Special Support Fund, with 80 percent share; Special Local Road Fund, with five percent share; Special Road Safety Fund, 7.5 percent share; and Special Vehicle Pollution Control Fund, 7.5 percent share.

    From 2001 to present, the Road Fund already amounted to around P100 billion.

    The fund is reported annually in the President’s Budget of Expenditures and Sources of Financing (BESF) under “Earmarked Revenue.” Since it is automatically appropriated, it does not need the year-by-year appropriation from Congress.

    When Sen. Miriam Defensor-Santiago raised a howl against the “anomalous” use of the Road Fund, she said, ”With or without the GAA, the total revenue collected by the LTO is remitted and deposited to the four accounts, according to the percentages prescribed by law, and are then spent by the Road Board.”

    To be continued

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    14 Comments

    1. Ramon B. Cruz on

      Let us pray for our country to be healed, get everyone to do good. The Freedom of information bill is one of the solution.

    2. Alisin na natin sa usapan ang Hyatt-10, dahil hindi na sila Hyatt-10. Sila ay mga Hayop-10 na. Mas malala pa sila sa baboy. Paran mga dracula pag may masisipsip pa kapit pa yan kay Abnoy “The Thief Executive’.

    3. I suspect that the Hyatt-10 group are advising the President on this controversial budget system where billions of funds are hidden to the public for purposes only the President and his allies know. Same as what happened during Ex Pres. Gloria’s rule. Worst these monies mostly are doled-out to cooperating congressmen, senators, governors, mayors till the smallest LGU leader and only God knows how much were pocketed and how much used for political patronage.

    4. This is why we need the FOI bill, not the watered-down version, but the one that will allow ordinary citizens to access and critique the budget. The FOI bill, if passed, will create more Miriam Santiagos and more people will “howl” against these anomalous transactions.

    5. Andrew Jarencio on

      Why is it that during the encumbency of Prof. Briones as National Treasurer and Prof. Diokno as Budget Secretary, we never heard them speak against pdaf and off budget account(OBA). I think they have no moral reason to criticize the present administration since during their time they did nothing about this mater.

    6. Well Well!

      If there is transparency in govt –Then when it comes to the huge sums entrusted to leaders of this wonderful country..Surely this is where transparency is most needed..?

      How easy if we have hidden accounts–Or so called “Slush funds” Is it to put ones hand into what is a huge personal bank –For those “Privileged few?

      Have we not learned anything from the “Marcos” era ..

      Again-let me remind you of what Einstein has been credited with saying “If we do the same thing;in the same way ..and expect different results ..This is a form of madness”

      Here we are again–giving our politicians /Lawmakers –The ability to have huge sums–with apparently no accountability..

      Then surprise Surprise–they take from us ..

      wonder-upon wonder !

      -We are practically saying “Go ahead we don’t care” and it show’s!

      We don’t have enough to make improvements that need to be done –

      We haven’t enough to guard against the storms that hit our Islands 20 times a year..! We don’t have enough so our Kids can gain an education ..So they can get job and support themselves…

      I recall a while back, that a young girl committed suicide ..Because she could not get enough money to continue her studies

      Yet here we have politicians able to “dip their greedy hands into the national till” To the tune of billions of Peso’s.

      What do we do about it? Just throw our hands up in the air;in despair

      Maybe we are as Einstein puts forward , going thru a form of madness–

      This Madness is costing us a fortune year after year…The question is ..When will it stop?
      David M Meyer MD.D.P.M,PhD

      • It will only stop when the people rise up and demand that we start with fresh leaders and boot out/imprison all the offenders to show that corruption does not pay while in public office. Good luck with that Philippines.

    7. So it would be a tedious task to closely scrutinise all these accounts closely. But if we are talking of P220 billion, surely a lettle of anything should be ok. So tedious or not why would anyone say it would be tedious to check everything in fine detail Could the reason be that they dont want thes in depth checks done because people are up to no good & dont want to get caught. Let me tell you someone who gets paid to do these checks wont find it tedious, they will be just so grateful of a paying job, & its the governments duty to account for the taxpayers money & where it goes to & any that goes missing well heads should roll & prison is the answer to these guys.
      But how is it all this money can just be taken out of the system with no one noticing. Who set up a system like this where so much money can just so easily disappear without anyone seeming to notice. So now we have this money on top of the por barrel scam, what else is there left to find out.
      No wonder people want to get into politics as there seems to be a never ending pot of money for them to dip into & it seems with impunity.

    8. P100 billion from the Road Fund?

      Look at the conditions of the roads in several areas of the country.

      Where was the money spent?

      I have become cynical of the government and the government officials.

    9. ILVING TABIOS ZAMORA on

      Ganyan kasi ang gawa nina Briones at Diokno noon kaya iginagaya nila ang PNoy admin sa kanila!

    10. How much the Fees collected by Government from NBI clearance, passports, prc license, LTO license and and fines, seaman books?