Projects that are unprogrammed should be kept out of a proposed GAA
The investigations of the flood control scandal by Congressional committees and the Independent Commission on Infrastructure (ICI) has identified a number of causes of the greatest fiscal debacle in the history of the Philippine government.
One of the identified causes is the system of attaching so-called unprogrammed projects to the National Expenditure Program (NEP) that the Executive Department sends to Congress for consideration and possible inclusion in the annual General Appropriations Act (GAA)
As the name indicates, unprogrammed projects are not part of the Executive Department’s program of projects scheduled for implementation during the year covered by the GAA. Unlike NEP projects, unprogrammed projects have neither implementation timetables nor budgetary allocation.
Unprogrammed projects are standby projects. Under Philippine budgetary practice, an unprogrammed project ceases to be a standby project and becomes a part of the NEP when new revenue sufficient to finance it becomes available.
This budgetary practice must be scrapped because it is objectionable on governance and economic grounds.
On governance grounds, the unprogrammed-projects practice is conducive to corruption. The NEP must be made up of clearly-identified, ready-to-go projects; there must be no room for contingent, possibly includible projects. Making provision for substitution—substituting unprogrammed projects for programmed ones—is an open invitation to corrupt legislators, especially the members of the small bicameral group that makes the final decision on which projects will comprise the NEP.
The requirement set by Congress and the Department of Budget and Management (DBM) for the inclusion of un programmed projects in the NEP is the availability of incremental revenues. Exactly where have the incremental revenues come from? From higher tax collections? From new taxes? The Filipino people are not told. They are made to presume that the incremental-revenues requirement has been fulfilled when an unprogrammed project is inclusion in the NEP. This presumption is unwarranted.
Why do incremental revenues have to be spent right away when they materialize? The Philippine economy almost certainly will not collapse if certain unprogrammed projects are not included in the NEP under discussion. In recent years numerous cases have been uncovered of appropriated funds being merely ‘parked’ by the grantee agencies. With the nation’s debt ever rising, the Treasury can readily use the incremental revenues for debt service.
A NEP that is made up only of programmed projects fully attested to by the proposing agencies leaves no room for behind-closed-doors insertions and substitutions, thereby foreclosing Congress-DBM corruption.
The unprogrammed-projects practice is likewise objectionable on economic grounds.
By definition unprogrammed projects are second-priority undertakings. They come into play only when the first-priority projects—the programmed projects—for any reason cannot be implemented. In the ideal economic management situation, every operating Cabinet department has in reserve projects ready for implementation in the event that any first-priority projects become unimplementable. Second-priority projects are kept on the shelf, ready to be brought forward when the need arises.
To repeat, any incremental revenues that come into the Treasury’s hands need not be spent right away; they can be carried over to the succeeding year’s budget. Because unprogrammed projects are second-priority projects, they will not cause the economy’s collapse if they are not implemented at once. And the behind-closed-doors insertions into the NEP is a formula for collusion and corruption. Projects that are unprogrammed should be kept out of a proposed GAA.
For all these reasons, this country’s budgetary practice of sending unprogrammed projects to Congress for possible favorable consideration should be scrapped right away. That means the 2026 budget cycle. (llagasjessa@yahoo.com)
