• On PDAF, lump sum appropriations, savings and all that

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    PROF. EMERITUS LEONOR MAGTOLIS BRIONES

    Emeritus Leonor Magtolis Briones

    The Supreme Court has already spoken on PDAF. It struck down congressional pork barrel or PDAF in all its forms. PDAF is only one of the lump sums in the much bigger Special Purpose Funds, which can only be spent with the approval of the President.

    The original proposal for 2014 Special Purpose Funds was for P310 billion, including PDAF. Now that the latter has been stricken off, the remaining P285 billion is still with the Executive.

    The Philippine budget system is full of lump sums. The Supreme Court has excised one lump, namely the PDAF. This constitutes less than 1% of the total projected expenditures for 2014 and less than 10% of the Special Purpose Funds.

    How about the P285 billion, which as stated remains with the Executive? How about the Off Budget Funds which are not part of the General Appropriations Act as well as the P139 billion Unprogrammed Funds? These are also lump sums—meaning allocations without detailed programs and expenditures. These give much discretion to the Executive.

    The position of Social Watch Philippines which has been monitoring the budget since 2006, is that these lump sums should be transferred to the operating agencies who will translate these into detailed programs, projects and expenditures. They will also be accountable for these funds. One advantage is that these agencies have short-term and medium term programs which are fairly detailed. They know the needs at the level of the regions, provinces and cities, as well as municipalities since they have officials at these levels. For example, the Department of Education has officials down to the municipal and even the barangay level.

    Another advantage is that these departments are audited annually and these reports are available to those who have access to Internet information. In contrast, lump sum appropriations like PDAF, Special Purpose Funds, and off budget funds are audited periodically. The latest reports on these lump sums are as of 2008 and 2009. Thus accountability is delayed if they remain as lumps sums.

    All of us know that in the human physical system, presence of lumps is a danger signal. When one lump is removed but all others remain that is even more dangerous. When new lumps emerge as soon as one lump is removed, perhaps a drastic operation and radical methods are called for.

    How about savings?

    Can lump sums be created from savings?

    Another thorny issue in Philippine budgeting is the use of savings. The law allows government bodies with fiscal autonomy like the Supreme Court, Ombudsman, and the office of the President to utilize savings and augment existing appropriations. A question, which has been raised since 2006 is, what constitutes the office of the president? Is it his own office whose budget runs to billions, or does it cover the entire national budget which runs to trillions? If it is the latter, there is the danger of straying into the territory of Congress, which is mandated to pass and approve the appropriations law.

    Still another confusing issue is: when can the executive declare savings? The normal procedure is to declare savings towards the end of the year. Can it be declared during any month, say, October? April? June?

    Perhaps national government can take a leaf from local government practice. Local government units declare savings at the earliest on December 15. These savings are subjected to another round of budget procedures and allocations have to be approved by the local legislative body.

    Does the National Executive secure the approval of Congress when “savings” are reallocated?

    Finally, an even more sensitive question. What happens when savings from appropriations are converted into congressional pork barrel? Since the Supreme Court has declared congressional pork as unconstitutional, can these allocations be deemed unconstitutional?

    Can a concept be unconstitutional?

    A legal luminary once asked if a management concept, theory or strategy can be declared unconstitutional. A concept is an idea. However, once the concept is translated into a program whose constitutional moorings are vague; once this concept is translated into concrete projects; once hard money is paid out of funds of the people, the question of constitutionality of the project has to be raised.

    Someone translated this fascinating question this way: if a person hates another so much that he seriously thinks of killing him, no crime has been committed if it remains a thought or a wish. Once it is translated into action and implemented, then a crime has been committed.

    On supplemental budgets
    The Lower House of Congress has just passed a proposed supplemental budget of approximately P14 billion. The Congressmen who demanded details of the proposal were correct in demanding concrete, detailed programs and projects.

    We might end up with another lump sum if we don’t watch out!

    Many unresolved budget issues remain
    The decision of the Supreme Court striking out congressional pork funds is just the beginning. There are still many other lump sums—whether part of the general appropriations act, off budget, or created from savings—whose legitimacy or illegitimacy must be clearly established. The journey continues.

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    3 Comments

    1. The only shocking thing about the SC’s decision is that it has only come recently. However, the story shouldn’t end with just PDAF because vulnerability is still inherent with the current system. Prof. Briones is absolutely right that lump sums have to be excised. I find it strange that some people are thinking of the issue in terms of the administration’s “trustworthiness”, given PNoy’s (formerly) high ratings among the public. It’s not an issue of whether or not PNoy is corrupt because laws aren’t built around good or bad presidents. It’s an issue of accountability and a system that can effectively guarantee this. How do we limit the traditional “political” factors in the budget and actually pursue its developmental purposes? I think we start with a systemic revamp of the budget and realize that we deserve a better government.

    2. This present Lower House of Congress is incorrigible and dense. They are passing supplemental budget without details. Any budgetary appropriation must have details, programs and project to fund. Without these, what programs and projects will the money appropriated be spent for? Both the Executive branch, and Congress are too lazy to think. The congressmen are appropriating funds for some imaginary things? This certainly creates an opportunity for graft and corruption! This is a mockery of a constitution. I am not surprise at all when I read somewhere that there is some uneasiness in the military, the institution mandated as the protector of the constitution.