Palace to Congress: Redefine ‘savings’

Critics slam move to circumvent anti-DAP ruling

MALACAÑANG has asked Congress to allow the declaration of savings by the first semester in the proposed 2015 General Appropriations Act despite a unanimous ruling by the Supreme Court that such an act under the Disbursement Acceleration Program was unconstitutional.

Communications Secretary Herminio Coloma said, however, that this was not a way to circumvent the Court’s 13-0 decision against the DAP.

“The bigger picture is to conduct 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,” he said.

In his budget message, President Benigno Aquino III asked Congress to “clarify the definition and use of savings and augmentation.”

“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 proposed 2015 GAA, savings are now defined as portions of allocations that “have not been released or obligated” due to “discontinuance or abandonment of a program, activity or project forjustifiable causes, at any time during the validity of the appropriations.”

With this definition, funds for projects that have not started within the first six months of the year can already be declared as savings by the Executive branch.

Previously, savings were defined as funds “still available after the completion, or final discontinuance, or abandonment of the work, activity or purpose for which the appropriation is authorized.”

The Supreme Court, in its decision on the DAP, said the executive branch was wrong in declaring unreleased and unobligated funds as savings because these were for projects that have not yet been discontinued with finality.

An administration critic, Kabataan Rep. Terry Ridon, said the new definition seemed custom-fit to legalize the unconstitutional activities that were committed under the DAP.

“A cursory reading of the variances between the savings definition in the current GAA and the proposed 2015 National Expenditure Program shows that the Aquino administration is attempting to legalize DAP and is actually paving the road for DAP’s re-emergence in the near future,” Ridon said.

Ridon said new terms in the proposed 2015 budget such as the “non-commencement, unforeseen modifications” and “re-assessment” of projects effecitvely widened the definition of savings.

“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 [project or program]. Under the new definition, the 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.

Ridon added that the new definition of savings directly contravened the Supreme Court decision on the DAP.

“The new definition of savings found in the 2015 NEP violates the third and fourth principle laid down by the Supreme Court. By allowing the Executive branch to effectively discontinue, stop or fail to begin the implementation of an approved [project or program] even in the early parts of the fiscal year to forcibly turn the appropriations for such into savings, the Executive has exceeded its delegated authority and impinge with impunity the congressional power of the purse,” Ridon said.

“If Congress allows this amendment in the definition of savings to pass, it 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,” Ridon warned.

“Redefining savings to tailor-fit the President’s embattled DAP is like legalizing corruption. We should stop this from happening by all means,” he added.

House Speaker Feliciano Belmonte, Jr., on the other hand, said Congress is well within the its constitutional mandate by defining “budgetary savings” to give the administration financial flexibility to use annual savings before the end of the fiscal year.

“We (Executive and Legislative) agree on one thing – the term ‘savings’ has no constitutional definition so it’s up for us to legislate,” Belmonte said.

Belmonte said Congress has the power to define the when a budgetary item can be declared as savings since the Supreme Court has banned its use before the month of November of the fiscal year when it ruled on the constitutionality of the Disbursement Acceleration Program.

“At what point can you use it? It’s within the area we can look into,” Belmonte said, insisting that the House can determine the “proper applicability” of the use of savings.

Leyte Rep. Ferdinand Martin Romualdez, leader of the independent minority bloc in the House, urged his colleagues to oppose the P501 billion lump sum appropriation for special purpose funds in next year’s P2.606 trillion budget, saying it did not provide full information for purposes of transparency.

“That amount is very huge and a Congress championing transparency and accountability that this administration has been bragging about should bar such appropriation because it does not provide the full details as to where the funds will be spent,” Romualdez said.

During the Palace’s submission of the 2015 national budget to Congress last Wednesday, Budget Secretary Florencio Abad said a total of P501.670 billion was to be set aside as SPF to be used for “calamity funds, contingency funds, miscellaneous personnel benefit funds, pension and guarantee funds, the Internal Revenue Allotment (for local government units), debt service or interest payments” and other items.

“The total amount that pertains to the Special Purpose Funds that I mentioned is P501.670 billion, or about 29 percent of the new General Appropriations Act. The rest are department and agency budgets,” Abad said.

Romualdez said most of the SPF should be put into specific allocations where transparency and accountability are observed.

“For example, the calamity fund can be transferred to line agencies directly involved in disaster prevention, mitigation and preparedness,” Romualdez said.

“Of course we cannot predict calamities but I would suggest that we lessen the lump sum funds so that we can ensure that public funds are not wasted by allocating these to specific purposes,” Romualdez added.

Also on Thursday, Senator Nancy Binay said she would file a bill or resolution holding liable those behind the cancellation of budgeted projects to produce “savings” for the DAP.

“I think there should be liability. What if they intentionally did not push through with the projects to generate savings?” said Binay, who grilled Cabinet members earlier this week on projects such as the rehabilitation of airports that were scrubbed in favor of the DAP.

Binay also said the Executive branch must be required to regularly report to Congress about the implementation of the budget.

COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Working Pillars of the House