, 2013
(PHILSTAR) By Kathleen A. Martin - The steady flow of remittances to the country may fuel more corruption in the government, an International Monetary Fund official said.

“In a sense, remittances create a fiscal space that the government can benefit from... [But] there is work that suggest that that space generated by remittances can actually lead to more corruption,” Ralph Chami, division chief at IMF’s Middle East and Central Asia Department, said in a podcast.

“Because the government thinks that if your relatives can subsidize your education, why provide education [and] if the remittances abroad can provide you with better health care, why provide health care,” Chami continued.

Money sent home by Filipinos living and working overseas help increase tax revenues for the government and this may also be considered as “windfall” profits, Chami said.

“The government can choose to do good things with it, or they can choose to do other things with it. It can fuel other kind of wasteful behavior on the side of the government,” Chami explained.

But he noted, “the individual may be aware the government is not providing the [social] services but feels less compelled to hold the government accountable to it because that individual is being insured by someone from abroad.”

Cash remittances from Filipinos abroad jumped 5.6 percent to $10.7 billion in the first half of the year from the same period in 2012. The central bank has forecast an annual five percent growth for remittances this year.

Chami said that what remains as the big challenge is shifting the use of remittances from mere consumption to become investments.

Most families or individuals receiving the remittances use the funds for household expenses, medical needs, education, and so on, and only a few divert part of the money to a savings account.

“So the issue then becomes remittances alleviate poverty but at the same time, we want them to be a source of capital for development. We want to change the nature from alleviating poverty... to making them a sort of like a private capital,” Chami said.

“The one-million-dollar question is how do we change the nature of remittances from basically trying to help your family at home to becoming a source of capital for development, making it a growth story,” he added.

‘Budget to be OK’d on time’ By Paolo Romero (The Philippine Star) | Updated August 25, 2013 - 12:00am 0 15 googleplus0 1

MANILA, Philippines - The proposed P2.3-trillion national budget will be approved on time despite moves to include new and elaborate provisions covering the disbursements of congressional allocations, leaders of the House of Representatives said yesterday.

Davao City Rep. Isidro Ungab, chairman of the House committee on appropriations, said members of the panel would have to work overtime to make sure the proposed General Appropriations Act (GAA) would be signed into law before the end of the year.

The GAA should be signed by President Aquino despite his announcement to abolish the Priority Development Assistance Fund (PDAF) and replace it with an itemized listing of lawmakers’ projects to be funded by their congressional allocations in the national budget, Ungab said.

“We will be meeting with the DBM (Department of Budget and Management) so that we in the House can work out the mechanics on the new provisions of the PDAF that will be both transparent and much less corruption-prone,” Ungab told The STAR.

“The way I understood the President is that from now on, all congressional projects will have to undergo the budget process,” he said.

Under the previous system, the PDAF is listed as a lump sum in the GAA, which in the 2014 proposed national budget amounts to P25 billion.

Each senator and congressman draws from the allocation to fund their projects from a menu allowed by the DBM that gives them some degree of discretion on how their pork barrel will be spent.

But Aquino said there would be no more PDAF lump sums and each project of every lawmaker must be itemized in the proposed national budgets to be seen by members of Congress and the public.

Each senator gets P200 million in pork barrel funds annually while congressmen receive P70 million each.

Aquino’s announcement, however, does not cover this year’s PDAF as the allocation is already mandated under the 2013 GAA, enacted in 2012.

Ungab, however, said even if this year’s congressional allocations cannot be altered, “we will be more transparent as much as possible.”


Ungab admitted drafting amendments to the proposed national budget for next year covering the congressional allocations would be tedious even as he urged the DBM to speed up its proposed guidelines.

“How do we list or itemize them (projects)? Would it be per House member and senator? Or by sector? If we will list it by each member of Congress, the volumes would be very, very thick,” he said.

The various sub-committees of the appropriations committees have been holding their respective deliberations of proposed budgets of various departments and agencies since the start of this month.

Ungab said meetings on the amendments would have to be integrated into them.

Another senior administration lawmaker, a member of the panel, said while the House is determined to implement the reforms, the changes are easier said than done.

The lawmaker, who declined to be identified, said Speaker Feliciano Belmonte Jr. and House Majority Leader Neptali Gonzales II held an initial meeting with other leaders of the chamber and parties belonging to the administration bloc somewhere in Mandaluyong City on Friday to determine how to proceed with the new rules.

“This is not just about presentation (of congressional projects) in the budget, but also their implementation, and even accountability of those implementing them. The listing may look nice but the funds may be almost impossible to release,” the lawmaker said.

“But everyone present are committed to work on these,” he added.

A different name

Senators belonging to the minority bloc aired their support to the abolition of the pork barrel fund system but emphasized the need to remove all discretionary funds in the national budget as well.

Senate Minority Leader Juan Ponce Enrile, Senators Gregorio Honasan and JV Ejercito said the abolition of the PDAF of legislators was just the first step in reforming the system because discretionary funds still exist in the budget.

Honasan said people should look out for the PDAF being replaced by some other item in the national budget under a different name.

He said the lump sum appropriations and discretionary funds of several government agencies should be closely monitored since they do not undergo the normal auditing process of the Commission on Audit (COA).

Enrile, for his part, said the PDAF should be scrapped totally, meaning all lump sum appropriations of all government departments and agencies.

Ejercito, on the other hand, said President Aquino should lead by example by scrapping his own special purpose fund from the proposed P2.268-trillion national budget for 2014.

“It will be beneficial for President Aquino if he shows sincerity by leading the way in effecting changes for the benefit of our nation,” he added. – With Marvin Sy, Jose Rodel Clapano, Artemio Dumlao, Charlie Lagasca

Chief News Editor: Sol Jose Vanzi

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