Candidates urged to divulge stand on the 2016 Budget, pork barrel and lump sums

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IN light of the ratification of the Bicameral Conference Committee report on House Bill 6132 or the 2016 General Appropriations Bill (GAB) by both Houses, Social Watch Philippines (SWP) calls on the candidates to state their position on important issues affecting the national budget. The ratified 2016 GAB will then be transmitted to the President for his approval and signature into law before Christmas.

SWP Lead Convenor Prof. Leonor Magtolis Briones said that “with the budget bill up for approval into law, it is important to recognize that its impact will essentially be passed on to the next administration. In context of the 2016 elections, citizens should challenge those vying for elective positions to disclose their stance on the 2016 Budget, including crucial issues and concerns that come with it.”

Bicam overlooked the Big Picture
The Conference Committee Report Summary indicated budgetary increases to the agency budgets amounting to P11.295 billion and special purpose funds with the amount of P7.791 billion. Major amendments include P1.2 billion for the pension of indigent senior citizens under the Department of Social Welfare and Development, P2.7 billion for capital outlay of state universities and colleges (SUCs) and the Tulong Dunong Program, P4.004 billion for the disability pension of veterans and P7.442 billion for the financing of the first tranche of the modified Salary Standardization Law, among other amendments which the Bicam integrated in the on the 2016 GAB.

The modifications were sourced from the budgetary reductions from within agency budgets (P7,336,708,000) and special purpose funds (P19,086,000); there were also realignments from within the unprogrammed funds (P6 billion) to cover Additional Equity Distribution.


The amended amounts approved by the Bicam are as follows: P1.663 trillion for departments and agencies (from P1.651 trillion) and P408.288 billlion for special purpose funds (from P419.583 billion). The total new appropriations remain at P2.139 trillion while automatic appropriations of P930.695 billion were untouched.

“While amendments and realignments have been done to the budgets of some agencies, special purpose funds and unprogrammed funds, it is painful to note that the Bicam did not examine the more critical issues that will have impact on the overall budget. The body merely retained the erroneous provisions on the definition of savings, augmentation and realignment of funds as proposed in the Bicam-approved 2016 Budget. Because of this, whatever amendments have been passed by both Houses may easily be withdrawn by the Executive. Unconstitutional declaration of savings and transfers will continue.” Briones stressed.

Red flags in the provisions on savings, augmentation and realignment

In its analysis, SWP found the following red flags on the authority and conditions to create and use savings, as well as on the meaning of augmentation and realignment of funds, as reflected in in General Provisions Sections 64-68 of the 2016 General Appropriations Bill (HB 6132) and supporting special provisions in key agencies:

— In Section 65a, we argue that the qualifier stating that savings can be declared “during the validity of appropriations” means at any time of the year. This means that the 2016 Budget will continue to authorize the declaration of savings by January or any other time of the year since the General Appropriations Act (GAA) is deemed released, in accordance with the GAA-as-release document directive. Moreover, it is unclear whether or not the finality in discontinuance or abandonment of PAP means such discontinued or abandoned project will be included in succeeding GAAs[1]. This is because the qualifier to discontinuance and abandonment does not clarify the extent of finality of such action.[2]

— In Section 65a/b, we contend that the provision allowing savings due to “causes not attributable to the fault or negligence of the agency” is vulnerable, vague and highly discretionary parameter and needs further guidelines.

— Section 65d: This provision allows savings even during procurement phase (difference between the approved budget for contract and the contract award price). There is no savings in this case since the project has not even started.

— Special provision stating that Chairpersons of Senate & House of Representatives Electoral Tribunals are authorized to use savings is questionable because they are not included in the list of authorized officers in the Constitution and the GAA.[3]

— We maintain that the inclusion of “unforseen modifications or adjustments and re-assessment” provisions results into a flawed meaning of augmentation in Section 66a&b.

— Vulnerable budgetary transfers of appropriations[4] refer to the realignment of funds by DBM & the heads of agencies without approval of the President (Section 68a&b)[5]; realignment within and from capital outlays during the 1st semester of the year (Section 68c); project modification by certain agencies within the first six months of the year[6]; realignment of allocation for operational expenses by Member of Congress.[7]

Prof. Briones said that the ratified definitions of savings, augmentation and realignment of funds were largely adopted from the 2015 General Appropriations Act (GAA). “These redefinitions exacerbate the three decisions of the Supreme Court on the Disbursement Acceleration Program (DAP) and the Priority Development Assistance Fund (PDAF) and should have been rejected by both Houses”.

“Before the definitions of savings, augmentation and realignment were overhauled significantly in the 2015 GAA, the previous budget laws, 2014 GAA the latest, define these terms in accordance with what is provided for in the 1987 Constitution as validated by the Supreme Court”, she noted.

“Unfortunately for both Houses of Congress, their action to ratify the redefined provisions shows that the die is cast by the Executive from the beginning. The legislature will again allow artificial savings & discretionary budget transfers to perpetuate in the 2016 Budget, hence legitimizing existing practice despite favorable Supreme Court ruling on the unconstitutionality of DAP and PDAF.” Briones lamented.

Aspirants for public office, where do you stand?
“Advocates have done all they can to campaign for savings to be reverted to its old definition, which adheres to the Constitution and to generally accepted practice and international standards. On the other hand, petitions have been filed before the Supreme Court against PDAF-like funds and DAP-like budget transfers; while court proceedings are on-going against officials who were charged in the fraudulent spending of pork barrel funds,” Prof. Briones shared.

However, the Basic Law of the Land has still been violated because the framework for DAP and pork barrel still exist. The national budget passed by Congress contains lump sum appropriations with PDAF- and DAP-like characteristics and mechanisms. “We have been stuck at counting the leaves while we overlook the entire forest. By focusing largely on the budgets of agencies, Congress essentially yields its Power of the Purse to the Executive by passing a budget with most if not all lump sums, PDAF-like funds as well as savings and realignment provisions kept intact.” she remarked.

Addressing aspirants for public office, Prof. Briones declared, “Social Watch challenges candidates to articulate their position on the 2016 Budget and how they stand on issues concerning the diminishing Power of the Purse, discretionary lump sum funds, budget transfers and realignments, persistence of pork barrel, and the distortion of budget terms such as the meaning of errata as applied to the budget and the redefinition of savings. We also call you to pronounce concrete platforms and policies on instituting reforms to the budget and public finance.”

“The Filipino people have declared their condemnation of pork barrel and budget abuses through various groups and networks such as the SWP-convened Alternative Budget Initiative, Scrap Pork Network which ignited the Million People March against Pork Barrel, Freedom from Debt Coalition, BAYAN MUNA and the progressive bloc, SANLAKAS, Abolish Pork Movement, Philippine Constitutional Association, including the organizations which filed petitions against PDAF and DAP before the Supreme Court,” she added.

“All of us are taxpayers and the people’s money affects everyone. One area of intervention is to affirm the importance of the budget as an election issue. We should choose leaders based on platforms on the budget and public finance which pursue sustainable development, uphold the Constitution and maintain balance of power in the government,” Briones said in closing.

[1] Diokno, B.E. (2013, Oct. 12). Savings and Augmentation. Per Se. Retrieved at http://www.econ.upd.edu.ph/perse/?p=3210

[2] “Causes not attributable to the fault or negligence of the said agency which would not render it possible for the said agency to implement [PAP].”

[3] As reflected in Augmentation of Any Item in the Appropriations of the Congress of the Philippines, Special Provision (SP) 1, Lines 57-61 Page 13 Vol II-A, 2016 General Appropriations Bill (HB 6132)

[4] As indicated in General Provision Section 68, Rules in the Realignment of Funds, Lines 38-56 Page 800 Vol II-B, 2016 General Appropriations Bill (HB 6132)

[5] Section 68a&b: Realignment of funds by the head of the agencies and the DBM without the approval of the President is a violation of the Constitution and the DAP ruling because agency heads are not authorized to use savings for the purpose of augmentation; even Section 64 does not list agency heads among those with authority to use savings. These provisions are tantamount to authorizing transfer of appropriations.

[6] Agencies authorized for Projection Modification are the following: Department of Agriculture, Department of Education, Department of Health, Department of Public Works and Highways, Department of Transportation and Communications and the National Irrigation Authority

[7]As shown in Realignment of Allocation for Operational Expenses, SP 4, Lines 15-17 Page 14 Vol II-A, 2016 General Appropriations Bill (HB 6132)

Social Watch Philippines
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