Making Good Governance work in Government

(lump sums, off budget items, unprogrammed funds etc.)

BY: Professor Emeritus Leonor Magtolis Briones U.P. National College of Public Administration and Governance Lead Convenor, Social Watch Philippines Chair, Peoples Public Finance Institute October, 2013

Importance of the Budget in National Development

The Philippines is facing many challenges, the most serious of which are poverty, climate change, health and education, and unemployment. The budget is the most powerful instrument of the government in responding to these problems. It can be an instrument for the redistribution of income groups to fund services and create jobs for the poor. The budget can be used to provide education and health services, as well as training and capacity building and fund projects to create employment. The budget can be used to stabilize the economy and control inflation.

Importance of the Role of the Congress in the Budget

The need to ask questions on the analysis of the government on the performance of the economy, its policies, thrusts and priorities The need to ask questions on what is explicitly stated, and also the more implicit or what is not there The need to engage the executive on longstanding issues on citizens participation, special purpose funds, etc. The need to demand accountability from the government

Importance of the Role of the Congress in the Budget

The Budget is an instrument of fiscal policy which includes policies on revenues, expenditures and borrowing The Budget as part of fiscal policy has three functions:

Allocation function Distribution function Stabilization function To these three functions, I add the Development function

Basic Facts about the Budget

National Expenditure Program- the total amount of projected expenditures for 2014 PhP 2.268 trillion

the General Appropriations Act which will be approved by Congress the above amount is composed of the budget of departments and agencies - PhP 1.162 trillion Special Purpose Funds -PhP 310 billion 1.472 trillion

-PhP 1.472 trillion

the Special Purpose Funds includes the PDAF OR pork barrel -PhP 25.2 billion Automatic Appropriations which is composed of Debt Service-interest payments internal revenue allotment net lending retirement life insurance premiums special accounts in the general fund -Ph352.7 billion -PhP 341.5 billion -PhP 24.9 billion -PhP 28.9 biliion -PhP21.1 billion -PhP 796 billion

In addition to the National Expenditure Program, there is the Unprogrammed Fund---------------------PhP 139.9 billion

Furthermore, there are the Off Budget funds" which are direct remittances.

Examples :

PAGCOR remittances to the Office of the President (ph 2.6b) Malampaya Funds (ph 26b) Motor Vehicles Users Charge(ph12 b) (Members of Congress are alloted 10M each from MVUC)

of pork and lump sum appropriations...

lump sum for Congress--------------------------25.2 billion lump sums under the control of the President Special Purpose Fund ---------------310 billion Direct Remittances-------------------------------40.6 billion Unprogrammed Funds---------------------------139.9 billion Intelligence Funds-------------------------------846 million

Campaign Advocacy of Social Watch

1. 2. 3. 4.

5. 6.

Abolition of Special Purpose Funds which includes Pork Barrel Abolition of all Lump Sum funds Transfer these amounts to the different frontline agencies; consider the ABI Proposals Revisit the interpretation of the constitutional provision which allows the President to transfer funds in the General Appropriations Act. The phrase his Office is interpreted as the entire government system. Integrate Off Budget items with the General Appropriations Act Give details of Automatic Appropriations

Under the constitution as currently interpreted, the President can create savings, transfer expenditures from one agency to another. thus he can move items in the PhP 2.268 trillion expenditure program if he wishes. All presidents have done this. It is, of course, vulnerable to abuse.

POSTSCRIPT: THE DISBURSEMENT ACCELERATION PROGRAM-- NEW WINE IN OLD SKIN BOTTLES

WHEN WAS THE DISBURSEMENT ACCELERATION PROGRAM LAUNCHED?

1.

The Executive announced the creation of DAP on October 12, 2011. 2. WHERE DID THE FUNDS COME FROM? A. unreleased appropriation for personal services - Ph30 billion B. unreleased appropriation for discontinued and slow-moving projects in 2011 -ph482 million

C. realignment of 2011 budgetary items within agencies in favor of fast disbursing projection - ph7.75 billion
D. 2010 unprogrammed funds - ph12.34 billion E. unreleased appro for discontinued and slow moving projects in 2010 carried over as pooled savings in 2011- 21.54 billion

3. Constitutional Questions A. What is the basis of the president's power to accumulate and transfer savings-? Article VI B. Do the amounts given to the senators and congressmen constitute pork? Yes, under the international and local definitions, these funds given to legislators constitute pork. C. Can regular appropriations be converted into savings and then converted again to pork?

4. public management questions A. When should savings be declared? Isn't it at the end of the year? Who declares savings? Why were savings declared in october? B. If the purpose of the funds is to accelerate development, why was it released in 2012, at a time when two major events were taking place: The corona impeachment and the build-up of funds and expenditures for The 2013 elections? C. What is the status of DAP? AFTER 2011, was it increased further?