Pass needed budget reforms ASAP



BUDGET Secretary Benjamin Diokno proposed recently the enactment of a budget reform law that contains, among other things, safeguards against underspending. He deserves full support from our lawmakers who must act fast so that the law could take effect next year.

The vile effects of budgetary underspending were most manifest in the unlamented administration of BS Aquino The Last. Every year, he asked for and got a higher budget and yet, each year, he failed to use all of the funds given him. Why? The answer is simple—unspent funds at the end of a fiscal year are considered savings that Malacañang could use any way it wants, including more pork barrel for supporters and friends.

Underspending laid bare the pretensions of BS Aquino of being reform- minded. The worst was in 2014 when his administration underspent an average of P827 million a year. In December 2014, some P274 billion of the budget for that year was still unspent. Yet, with only a few weeks left and with billions lying idle, he asked for a supplemental budget for those dying days of the fiscal year. The spineless Congress approved the supplemental budget and with no time left for the money to be spent that year, the new budget served to bloat the “savings.”

Reform beyond underspending

A leader seeking good governance wouldn’t underspend when there are many sectors needing more funds. Budget Secretary Diokno is decidedly such a leader. However, his proposed budget reforms must go beyond the President and the recurrence of underspending. There’ll be more meaningful reform if he would push for the end to Malacañang’s usurpation of Congress’s supposedly inherent “power of the purse.”

The budget process goes beyond the enactment by Congress of a General Appropriations Act (GAA) for a given fiscal year. Funds must still be released by the Department of Budget and Management—and Malacañang has the legal power to deny funding even for items contained in the GAA and passed by Congress after so many committee hearings and floor debates.

Malacañang could override Congress on budgetary matters because of Presidential Decree 1177 issued by then President Ferdinand Marcos on July 30, 1977. This PD grants the President the power to transfer any funds appropriated in the GAA for the different executive departments. It also authorizes the President to augment any appropriation of the executive department from savings.

These powers are already controversial but they are not more so than the provision for the automatic servicing of debts and the government guarantees for the payment of loans. At least 40 percent of the national budget goes to debt servicing.

Embracing martial law powers

During martial law, critics flailed away at PD 1177 for clipping the legislature’s “power of the purse.” The view from the top must be different, for when the critics assumed power, they threw to the waste basket all bills seeking to repeal it. BS Aquino hates Marcos and martial law but he loved PD 1177. He was one of the chief executives who found nothing wrong in taking over the “power of the purse” that rightfully belongs to Congress.

Will President Rodrigo Duterte join them? I know it’s very difficult to give up a power but justice demands that the stolen “power of the purse” be returned to its rightful owner. Of course, it’s another thing if Congress itself doesn’t mind losing its inherent power.

There were a number of lawmakers, past and present, who squirmed at the thought of PD 1177’s giving the Executive supremacy over the legislature on budget matters. Among them are Albay Rep. Edcel Lagman, the late Senator Joker Arroyo, former Senator, now Taguig Rep. Pia Cayetano, and former Senator Edgardo J. Angara.

Angara once lamented: “The policy on automatic appropriation on debt service encourages reckless borrowing and spending as it guarantees payment without legislative intervention and without going thru a thorough screening.”

Perhaps, the next best budget reform move is to stop considering any amendment to the National Expenditure Program (NEP), the budget proposal of the President, as an “insertion” or “congressional initiative” subject to Malacañang’s okay.

The Senate and the House normally create new projects that are needed with changes in circumstances, after the submission of the NEP. Or, they may decide to augment the funds of a worthy project that they find underfunded. These amendments should no longer be visited by Malacañang and the GAA as implemented should hew closely to the GAA as passed by Congress.

As another budget reform, how about reining in government-owned and -controlled corporations (GOCCs)? A closer scrutiny by Congress of the operating budget of the GOCCs could prevent a repetition of the sufferings wrought on the country by the uncontrolled borrowing and spending of the National Power Corp. It could also prevent the National Food Authority from falling into the same quicksand.


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  1. Ph really need to increase the representation & empowerment of the typical pinoy juan de la cruz.
    It can be done by changing the election process of
    (1) senators to 1 per province every 3 years,
    (2) provincial board member to 1 per town, & (3) municipal councilors to 1 per barangay.

  2. Efren Limos Danao on

    Correction: The correct underspending for 2014 is P827 million a day, not P827 million a year.