Category: money

Why Senate should not allow the redefinition of savings and change the meaning of ‘errata’

By Leonor Magtolis Briones 

Last Monday, November 17, 2014 a number of interesting events happened in the Senate. In the morning, a necrological service was held for the much-loved Senator Juan Flavier. Two other related events took place: the referral to the Committee on Finance of the General Appropriations Bill (House Bill 4968) and a briefing by Social Watch Philippines on why the Senate should not allow the redefinition of savings and change the meaning of the word “errata.”

Read on…

Brion’s hand on Abad’s collar

By John Nery

Much has already been said about the incident involving Budget Secretary Butch Abad and a score of student protesters at the University of the Philippines the other week. Inquirer reporter Erika Sauler’s summary sentence, in a report she filed a few days after the incident, can serve as a helpful wrap-up: “As he exited the auditorium [and made his way] to his vehicle, a group of protesters from Stand UP (Student Alliance for the Advancement of Democratic Rights in UP) ganged up on him, calling him a thief as they threw crumpled pieces of paper, placards and coins in his direction.” Other reports described one protester grabbing Abad by the collar.

Regardless of where one stands on the issue, whether the students were justified in their violent protest or not, the incident seems to me to demonstrate that words in fact have consequences in the real world.

When the Supreme Court released its decision finding parts of the controversial Disbursement Acceleration Program unconstitutional, the following two paragraphs were immediately taken as justification for the anti-DAP position.

“Nonetheless, as Justice [Arturo] Brion has pointed out during the deliberations, the doctrine of operative fact does not always apply, and is not always the consequence of every declaration of constitutional invalidity. It can be invoked only in situations where the nullification of the effects of what used to be a valid law would result in inequity and injustice; but where no such result would ensue, the general rule that an unconstitutional law is totally ineffective should apply.

“In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities.”

In other words, President Aquino, Abad and other officials were deemed guilty until proven innocent (or possessing good faith). I think there is a straight line from this extraordinary inversion, from Justice Brion’s hand, to Abad’s collar.

where’s our sense of priorities? #bohol

boholanos are feeling abandoned, said tina monzon-palma on anc news last night; many devastated boholanos had yet to receive any kind of relief goods and services three days after the quake.  on tv patrol charie villa observed that there seemed to be no foreign assistance coming in, unlike in other disaster ops, and noli de castro said it could be because the government had said we didn’t need help, we could handle it (or something to that effect).  of course it could also be because the roads leading to these neglected towns and barangays have been rendered impassable, and yet ANC was able to get there.  and on dzmm teleradyo’s SRO, doris bigornia asked pointedly why the congressmen of bohol, relampagos and yap, in particular, were nowhere to be seen or heard.

maybe it would have been different if the prez had been around — i’m sure south korea would have understood if he had postponed the trip to a better time — and then, again, who knows.  what’s clear lang is that other concerns seemed to have overwhelmed, such as how metromanila would fare if/when the west valley fault acts up, and meanwhile, are manila’s old churches safe? is malacanang palace?  and, of course, back in bohol, the question of bohol’s ruined churches, for which there is much wailing and gnashing of teeth, and the call for restoration seems to be getting more government attention, as if these were more important than the hungry, thirsty, miserable people of bohol, some of them desperate for loved ones still buried in rubble.

please, first things first.  unahin naman ang taongbayan ng bohol na kalunoslunos ang kalagayan, hindi ang mga simbahan that used to be.  those churches are gone. let’s settle for ruins as tourist attraction, why not, and build new ones on the side, stronger versions.  but all that should wait until life is back to normal for boholanos.  all that can wait until it is clear where the money will be coming from.  meanwhile, church authorities will simply have to fend for themselves and for their parishes, find places to hold mass and other rituals, rain and/or shine.  this is not a good time to ask the faithful for help to rebuild churches, not even the rich parishioners; any available funds and resources should first be poured into helping the people of bohol rebuild their lives.

and speaking of funds.  ano ba ang totoo?  ubos na nga ba ang 2013 calamity funds — break it down, please — and this is why palace spokesman lacierda is saying that they hope to use the “savings” aka DAP to respond to the needs of bohol?  i suppose he was also thinking DAP when he said this:?

“What we need in terms of assistance from international friends would be experts in restoring churches…these are heritage sites. We’re looking at making sure were able to restore churches,” Lacierda said.

“We will appreciate (international aid). We’re not calling for aid. No man is an island. Kagandahan lahat ng bansa, nagtutulungan ang marami. May concern sa bayan kung may maitutulong. We appreciate international assistance although we have enough resources to handle the situation,” he added.

or is it just a ruse to pressure the supreme court to rule on DAP’s legality fast, otherwise kawawa naman ang bohol?  sana naman hindi.  surely mayroong matuwid na paraan.

A permanent solution to the broken budget System

By Benjamin E. Diokno

… Recent events show what’s wrong with the present budget system. After almost a year of budget preparation (January to July) and budget authorization (August to December), the President may choose to reorder the budget and implement it any way he wants. In 2011, the President, acting on the recommendation of the Budget Secretary, created a P72.2-billion Disbursement Acceleration Program (DAP).

The DAP was the source of P1.1 billion in additional pork barrel a few months after the senators voted to convict former Chief Justice Renato Corona last year.

Except for four senators — Ping Lacson, Joker Arroyo, Pia Cayetano, Bongbong Marcos, and Miriam Defensor — all 20 senators received an amount ranging from P44 million (for Teofisto Guingona) to P44.5 million (for Koko Pimentel) to P92 million (for Juan Ponce Enrile) and P100 million (for Frank Drilon). The other senators each received P50 million.

Call it anything you want — a bribe, an incentive, or a reward — but clearly, this suggests that the market-clearing price of a vote convicting Corona is roughly P50 million. The congressmen who voted to impeach Corona got their own fair share. Mr. Abad has yet to reveal the list of congressmen who received the additional pork and how much.

Mr. Abad revealed that the additional pork came from DAP which was introduced in 2011 and reintroduced in 2012. Curiously, no such budget items exist in the General Appropriations Acts (GAA) of 2011 and 2012. It came about as a result of the almost limitless power of the President to slice and dice the GAA to generate large lump sums as a source of discretionary spending.

In a sense, this confirms the huge pork barrel at the discretion of the President. In 2011, as part of the P72-billion DAP, Mr. Aquino released an additional P10 billion to the National Housing Authority, P5.4 billion for the Department of Agrarian Reform, P8.6 billion for the Muslim Mindanao Autonomous Region, and augmented the Internal Revenue Allotments by P6.5 billion.

The preparation of the DAP was done at the inner sanctum of the Department of Budget and Management (DBM), away from the public’s eyes and definitely without the participation of members of Congress.

The following questions might be asked: How were the new budget commitments arrived at? Where did all these monies go? Who were the service providers? Were they chosen through competitive biddings? And who were the real beneficiaries?

For 2012, the DAP reemerged. Because the budget was not carefully reviewed by Congress as before and because project implementation was still slow, the President realigned and reshaped the budget so some new projects could be funded. Some of these projects were the Department of Tourism and the Department of Public Works and Highways (DPWH) projects (P5 billion), premium payments for teachers (P4 billion), Tulay ng Pangulo (P1.8 billion), rehabilitation of regional health units (P1.96 billion), the Department of Education’s public-private partnership for school infrastructure (P4 billion) and Bangko Sentral’s capital infusion (P20 billion).

Now, it is the Commission on Audit’s responsibility to find out how these pork barrel funds — congressional and presidential — were allocated and disbursed. Was the money spent well, leaked out with the help of some corrupt NGOs (not necessarily Napoles’), or did it end up in the pockets of some legislators?

Most Filipinos, especially those who pay their taxes diligently, are furious at their leaders for misallocating, misusing, and directly partaking of their taxes.

There is hope. But only if the Aquino administration will act on some real budget reform proposals like the Budget and Impoundment Control bill and the Freedom of Information (FOI) bill. He should also commit to strengthening the budget review staffs of both Houses of Congress.

But there are reasons to despair, too. First, the President has shown his willingness to defy the overwhelming public outcry against the pork barrel. He appealed to the Supreme Court for the lifting of the TRO on the release of the balance of the Priority Development Assistance Fund for 2013.

Second, his allies in House of Representatives are equally defiant and totally unresponsive to people’s preference. The House passed the P2.268 trillion President’s Budget for 2014 with the P25.4-billion pork barrel intact — hidden in the budgets of various departments, the bulk of which will go to DPWH. The Department of Health and the Department of Labor will each get P3.69 billion, while the Department of Social Welfare and Development will receive P4.71 billion.

The Department of Education will receive an additional allocation of P1.02 billion, while the Commission on Higher Education will get P2.67 billion for scholarship programs.

The redeployment of the budget from PDAF to line ministries is illusory. But it doesn’t fool the general public. In practice, there is no guarantee that these new line items will be released by Malacañang. Under existing budget rules, the President retains his power to cherry pick, to choose which budget item to release and which to withhold.

Third, the President refuses to integrate into the regular budget the following off-budget sources of revenues: the P130-billion Malampaya Fund, the P12.5-billion motor vehicle users’ charge, the Philippine Amusement and Gaming Corp. social fund and the Philippine Charity Sweepstakes Office’s charity fund.

The current pork barrel controversy, and the perceived and real abuses of the presidential power to disburse, have given President Aquino III a rare opportunity to permanently fix the flawed budget system. Such opportunity, if seized, will strengthen the weak political institutions. Otherwise, elections will forever be available only for the rich and Congress will forever be subservient to Malacañang.

It would be a monumental tragedy if Mr. Aquino would let this opportunity to fix what’s wrong with the budget system go to waste.

Dr. Diokno is Professor of Economics at the U.P. School of Economics and was Secretary of Budget and Management.