BEN DIOKNO-ECONOMIC UNDERSTANDING: BRIBE, INCENTIVE OR REWARD? / WHERE HAVE THE CALAMITY FUNDS GONE?

 

MANILA, NOVEMBER 11, 2013 (MANILASPEAK.COM) ORIGINALLY POSTED ON SEPTEMBER 30, 2013 - If a nationwide survey were to be done today, it would likely show that the approval rating of President Aquino has hit rock bottom.

But the slide might not be done yet.

Many Filipinos are disappointed, dejected, and disgusted with the way our national leaders have managed the taxpayers’ money.

Department of Budget and Management (DBM) Secretary Abad admitted that 20 senators received a total of P1.1 billion in additional pork barrel from October to December 2012—a few months after they voted to convict former Chief Justice Renato Corona.

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

Call it anyway you want—a bribe or an incentive for good behavior—but clearly, this suggests that the market-clearing price of a vote convicting Corona was approximately P50 million.

Bribe-Incentive-or-Reward

In addition, an overwhelming majority of representatives received extra lump sum funds from the Disbursement Allocation Program (DAP), albeit in smaller amounts. How much did each congressman receive after they signed the articles of impeachment? The public is waiting for the list of recipients, Mr. Abad.

What is equally intriguing is the source of funding. Mr. Abad revealed that the extra releases came from the DAP, which first appeared in 2011 and was reintroduced in 2012. Curiously, no such budget item existed 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 source of discretionary spending.

This, clearly, confirms the huge pork barrel of the President.

The DAP was prepared in the inner sanctum of the DBM, away from the public’s eyes and definitely without the participation of members of Congress.

In 2011, as part of the P72-billion DAP, Mr. Aquino released an additional P10 billion to the National Housing Authority (NHA), P5.4 billion for the Department of Agrarian Reform (DAR), P8.6 billion for the Autonomous Region in Muslim Mindanao (ARMM), and augmented the Internal Revenue Allotments (IRA) by P6.5 billion.

The following questions might be asked:

How were the new budget items arrived at?

Where did all these monies go?

What were the lucky provinces, cities, and towns?

Who were the service providers?

Were they chosen through competitive bidding?

And who were the real beneficiaries?

For 2012, the DAP reemerged. Because, the 2012 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 those of the Department of Tourism (DOT) and the Department of Public Works and Highways (DPWH) (P5 billion), premium payments for teachers (P4.0 billion), “Tulay ng Pangulo” (P1.8 billion), rehabilitation of regional health units (P1.96 billion), DepEd’s public-private partnership for school infrastructure (P4.0 billion), and Bangko Sentral’s capital infusion (P20 billion).

Now, it is the Commission on Audit’s (COA) responsibility to find out how these pork barrel funds—congressional and presidential—were allocated and disbursed.

Most Filipinos, especially those who pay their taxes diligently, are mad 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 honest-to-goodness budget reform proposals like the Budget and Impoundment Control (BIC) bill and the Freedom of Information (FOI) bill. Mr. Aquino should also commit to strengthening the budget review staff of both Houses of Congress.

But there are reasons to despair, too. First, the President has defied 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 PDAF for 2013.

Second, his allies in the House of Representatives are equally defiant and totally unresponsive to people’s preference. The House passed the President’s P2.268-trillion 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.

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 PAGCOR social fund, and the PCSO’s charity fund.

The current pork barrel controversy and the perceived and real abuses of the presidential power to disburse have given President Aquino 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 Malacańang.

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

OCTOBER 24, 2013

Where Have the Calamity Funds Gone?

The recent tragedies in Bohol and Cebu and the seemingly dismal response of the central government to the human crisis got some people asking: “What happened to the Calamity Fund (CF)?”

The confusion arose from the dissonant voices of top government officials.

The presidential spokesman talked of unlimited funds available for the earthquake victims. Yet, the Department of Budget and Management (DBM) secretary hinted that the CF is close to being exhausted.

Some legislators suggest that the unreleased balance of the PDAF (the subject of the Supreme Court’s TRO) should be realigned to augment the CF. Others suggest the use of the Disbursement Acceleration Program (DAP) to augment the CF.

Was another DAP created in 2013?

Both suggestions are clearly desperate attempts to deodorize the much criticized, illegal, and odious PDAF and DAP.

The P7.5-billion Calamity Fund is appropriated for “aid, relief, and rehabilitation services to communities/areas affected by man-made and natural calamities; and repair and reconstruction of permanent structures, including other capital expenditures for disaster operation; and rehabilitation activities.”

As part of the CF, quick response fund (QRF) allocations were lodged under the budgets of the following implementing agencies: (IMAGE)

Calamity-Funds01

Have these stand-by funds been exhausted? What’s the remaining balance of the CF to date?

That’s easy to check. Go to the DBM website. Senators and representatives should also know because DBM is required to submit a quarterly report to the Senate Finance Committee and the House Appropriations Committee on the status of budget execution. If only legislators would read these reports!

The priority in the use of the CF is aid and relief of the people affected by calamities. For public works, the priority should be repair. The reconstruction and permanent improvement could wait for another two months.

The government has a lot of tools to address the misery of the victims—the loss of life, livelihood, and property.

For example, the Department of Social Welfare and Development (DSWD) may choose to advance the Conditional Cash Transfer (CCT) entitlements of those in the program residing in the affected communities. I estimate that of the P44.5 billion budget for CCT authorized for the whole year, some P2.5 billion may go to recipients in Region VII (Central Visayas).

There are large chunks of appropriations for public infrastructure for Region VII. Below are some examples:

Calamity-Funds02

Speedy implementations of all these projects would create a lot of employment opportunities in the affected region. Providing meaningful, decent jobs is perhaps the best way of helping these people in distress.

The Government Service Insurance System (GSIS) and the Social Security System (SSS) may provide salary loans for employees who are victims of the earthquakes.

And if the CF was truly exhausted or proven to be inadequate, the President may submit to Congress a request for a supplemental budget. It’s been done before. It could be done again.

I’m confident Congress can approve the request for a supplemental budget in less than a week. And should Congress be adjourned, the President may even call a special session for the purpose.

This is the prim, proper, and legal way of helping the victims of the Bohol and Cebu tragedy.

FOR MORE ABOUT BEN DIOKNO'S ECONOMIC UNDERSTANDING, PLEASE GO TO THE MANILA SPEAK WEBSITE: http://www.manilaspeak.com/author/ben-diokno/

Dr. Benjamin Diokno is a Professor of Economics at the University of the Philippines. He was Secretary of the Department of Budget and Management during the Estrada Administration and Undersecretary for Budget Operations during the first Aquino Administration. Under the regime of President Corazon Aquino, Diokno was responsible for major reforms during the Freedom Constitution such as the design of the 1986 Tax Reform Program which introduced the value-added tax (VAT). Under President Estrada, he introduced the "what you see is what you get" or WYSIWIG Policy which simplified the system of fund release for the General Appropriations Act (GAA).
 


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