2015 budget ‘legalizes’ DAP
Militant lawmakers vow to block new definitions for ‘savings’
New definitions for “savings” in the proposed P2.606-trillion national budget for 2015 have virtually legalized some of the acts under the Disbursement Acceleration Program (DAP).
The Supreme Court (SC) had earlier declared some key acts under the DAP as unconstitutional.
With this major legal setback, President Aquino has asked Congress to institutionalize two budgetary terms in the proposed 2015 budget – allow the declaration of savings in the middle of the year as well as impose a one-year validity of appropriations.
The President made the proposal as the executive branch seeks to “de-clog the budget implementation process” and enable agencies to implement their programs and projects as early as possible.
The SC had ruled that the executive branch erred in the declaration
of savings in the middle of a fiscal period since it violated the definition of savings on previous General Appropriations Act (GAA) that it can only be utilized by the end of the year.
With the executive branch’s move, progressive solons said they will not think twice to block the passage of a legislation that would alter the definition of “savings” in the proposed 2015 budget to make it “custom fit” for the supposed continued implementation of the DAP projects.
Kabataan party-list Rep. Terry Ridon accused the Department of Budget and Management (DBM) of changing the definition of savings in the 2015 National Expenditure Program (NEP) to fit the specifications for the DAP.
Ridon warned his colleagues against giving in to DBM’s whims, saying that “redefining savings to tailor-fit the President’s embattled DAP is like legalizing corruption.”
“This will be tantamount to fully surrendering the congressional power of the purse to the President. Passing this new definition would usher in a new age of fiscal dictatorship, wherein the checks and balances enshrined in the Constitution would all wilt away,” he said.
Bayan Muna Reps. Neri Colmenares and Carlos Zarate also assailed Malacañang for its bid to redefine savings, saying the move “undermines the Congress’s power of the purse and destroys the systems of checks and balance.”
“This new definition will unduly delegate to the President the power to re-appropriate budget in the middle of fiscal year,” Colmenares said.
He added: “President Aquino is insisting that his unconstitutional acts be entrenched in the national budget. That is an act of defiance against the Supreme Court ruling.”
For his part, Zarate said Aquino is committing a “budget dictatorship.”
“This is patently unconstitutional and runs smack of castrating Congress in performing one of its primary duties. President Aquino’s moves also indicate that he wants to do away with the budget deliberations and oversight of Congress and concentrate this upon himself,” he stressed.
WHAT THE PRESIDENT SAY
The President, in his budget message, urged Congress to “clarify the definition and use of savings and augmentation in light of our policy to push agencies to spend their budgets or else to lose it.”
“Given that this proposed budget will be valid for one year, it will be counter-intuitive to allow the declaration of savings and augmentation of deficient budget items only at the end of the year,” the President said.
“Thus, the proposed general provisions of this budget seek to allow the declaration of savings by the end of the first semester – a realistic time frame, as it gives enough time for the implementation of augmented programs and projects,” Aquino added.
In the same P2.606-trillion budget proposal for 2015, the President called on Congress to impose a “one-year validity of appropriations” that will no longer allow the use of budgets intended for the year to carry-over to the next year.
“This policy, we believe, encourages departments and agencies to utilize their allocated funds as early as possible, rather than to postpone the implementation of programs and projects to the following year,” the President said. “It also makes the accounting of the use of funds and the implementation of programs and projects more straightforward and transparent,” Aquino added.
But Ridon questioned the new provisions such as the “non-commencement,” “unforeseen modifications,” and “re-assessment: of program, activity or project (PAP) in the 2015 National Expenditure Program (NEP).
“In previous GAAs, there were no such things as ‘non-commencement’ or ‘unforeseen modifications.’ One strict requirement to determine savings is that the fund is still available after the final discontinuance or abandonment of the PAP. Under the new definition, DBM did away with the requirement of finality, thus expanding the president’s discretion over public funds and vastly clipping the congressional power of the purse,” Ridon said.
Some opposition lawmakers however claimed that the administration has in effect moved to legalize the DAP through the redefinition of budgetary items in the 2015 budget proposal.
Ridon said the provisions on savings under the 2015 budget proposal has been “custom-fit to legitimize DAP and allow its implementation in the future despite the adverse ruling of the High Court.
NEW DEFINITION OF SAVINGS
Under the 2015 national budget bill, the executive branch proposed new definitions of savings as “portions or balances of any programmed appropriations” that have not been released or obligated as result of “discontinuance or abandonment of the program, activity or project (PAP) for justifiable causes, at a time during the validity of the appropriations.
Savings may also be declared for the funds of projects that have not started within the first semester of 2015 unless the implementing agency can show the project can still be implemented within the year.
The executive can also declare as savings if there is “decreased cost resulting in improved efficiency” in the implementation or completion of projects.
“Savings may likewise refer to available balances of appropriations arising from unused compensation and related costs pertaining to: unfilled, vacant, or abolished positions; non-entitlement to allowance and benefits; and leaves of absences without pay,” the budget proposal read.
In the use of savings, the executive branch said priority must be given to the augmentation of the amounts set aside for payment of compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans, and other personnel benefits.
In the same 2015 budget bill, augmentation is now defined as the act of filling up a deficiency in any existing program of an agency from savings in other items of said agency’s appropriations.
A deficiency in a project may result from unforeseen modifications or adjustments in the project and re-assessment in the use, prioritization and/or distribution of resources.
The administration’s 2015 budget proposal was submitted to Congress by Budget Secretary Florencio Abad Wednesday afternoon. A public financial management reform bill will also be submitted soon for the approval of Congress.
Asked about the government’s goal to redefine the savings in the 2015 national budget, Presidential Communications Operations Secretary Herminio Coloma Jr. made clear that this was in compliance with the SC decision on DAP.
Coloma, however, gave a vague answer when asked if there will be a revival of the DAP next year given the planned new definition of savings.
“We are talking about a budgetary process – that is the big picture. We are conducting the budgetary process in a way that is responsive to the needs of the country and that is also responsive to the principles of accountability, transparency, and openness, which this administration espouses. That is the big picture. That is the frame within which all of these considerations are being put in place,” Coloma said in a Palace press briefing.
The President, in the same budget message, kept his defensive stance on DAP even as he assured he was not defying the High Court.
“While we respect the authority of the Supreme Court, we humbly believe that its decision on the DAP failed to consider all our legal bases; more so that it hinged on a rigid and inflexible conception of public finance,” Aquino said.
He said filing a motion for reconsideration on the DAP ruling was the “right thing to do” because “we must ensure that our hands are not tied in fulfilling our mandate to spend each peso with efficiency, speed and maximum impact.”
The President also urged Congress to approve the 2015 national budget, which he described as a “Budget for Inclusive and Sustained Development.”
Aquino pushed for the transformation of the relationship between the Executive and Congress “into one that is defined by greater public accountability.”
He affirmed that the government continues to aim for “greater public accountability” as he warned against “those benefit from the old system” would not easily stand down.
HOUSE BILL ON SAVINGS
Meanwhile, Eastern Samar Rep. Ben Evardone beat Malacañang to the draw by filing House Bill 4470 that will make clear the rules on savings and augmentation of funds that are provided for in the current and prior years’ GAA.
HB 4470 has similarities with the Malacañang congressional joint resolution proposal that would define savings as used in the national budget.
Evardone proposed that savings may arise before and after the implementation of a program, activity or project within the current year of appropriations.
“Furthermore, this bill clarifies Section 38, Chapter 5, Book VI of EO No. 292, the Administrative Code of the Philippines, such that whenever the President suspends or stops further expenditure of funds, as public interest requires, the funds allotted to agencies or departments outside of the Executive may be declared as savings by the respective heads of Departments or agencies, and used in accordance with this proposed measure. This, in effect, reinforces the fiscal autonomy of such Departments and agencies,” he added.
Savings declared as a result of a provision of the bill must be used within six months from the time it has arisen. Failure to do so will result in the automatic reversion to the National treasury.