The Market Monitor Minding the Nation's Business
By Luis Leoncio
The pork-barrel system that was resurrected in the 2015 budget, reaching as much as P700 billion in lump sums, was the likely result of a conspiracy of some members of the Executive and Legislative branches to park lump-sum appropriations without intending to use these for the recommended purposes but actually for the selected legislators to realign their identified PAPs (programs, activities and projects), former Sen. Panfilo Lacson said.
“Hence, they became pork under the 2015 GAA (General Appropriations Act). We’ve seen this pattern in at least two agencies already,” Lacson said.
The identification of lump sums—or what is commonly known as pork barrel—in the 2015 preelection year budget seems to grow as the allocations to more agencies are reviewed, based on the findings of the team of Lacson that has thus far, tagged as much as P700 billion, or more than a fourth, of the P2.6-trillion state appropriations this year as discretionary funds.
The identified pork was almost double the P424 billion that Lacson and his team initially tagged as having been inserted in the budget that went to senators and members of the House of Representatives.
Lacson said the lump sums that have characteristics similar to the Priority Development Assistance Fund (PDAF) or the pooled money under the Disbursement Acceleration Program (DAP).
Lacson said the bigger lump sums in the 2015 budget were found in Department of Social Welfare and Development, with P102.6 billion; Department of Education, P80.7 billion; Department of Interior and Local Government, P80.7 billion; Department of Health, P75.4 billion; Department of National Defense, P66.4 billion; Department of Agriculture, P29.9 billion; Department of Public Works and Highways, P11.4 billion; Department of Transportation and Communications, P11.4 billion; Department of Environment and Natural Resources, P6.1 billion; National Irrigation Authority, P13 billion; and the Philippine National Police, P6.7 billion.
Lacson said he plans to file a petition for prohibition with the Supreme Court on the provisions in the 2015 budget that revived the pork-barrel system.
Lacson said the 2015 budget has provisions similar to the main act that the SC had ruled as illegal or the Department of Budget and Management’s (DBM) Circular 541.
The DAP, which Malacañang calls an economic stimulus program and which supposedly sought to speed up public spending, was funded through savings declared by departments and agencies even prior to the end of a fiscal year or derived from pooling unobligated allotments and withdrawing unreleased appropriations or applying the savings and unprogrammed funds to augment existing programs, activities or projects (PAPs).
Lacson said the 2015 budget has provisions that allowed agencies to realign funds on a certain quarter or month of the year.
Law Prof. Harry Roque of the University of the Philippines said that while he expected the Aquino administration to resurrect the PDAF and DAP eventually, “what we did not expect is that they would do so immediately after the Supreme Court had declared both the PDAF and DAP unconstitutional.”
PDAF, DAP resurrection
In a talk before accountants, Lacson unveiled the resurrection of both PDAF and the DAP; he said PDAF was revived in the form of a Unified Accounts Code Structure, or UACS.
“Recently, the government rolled out reforms in our public financial management. The government adopted, starting last year, the so-called Unified Accounts Code Structure or the UACS, a single classification system for all our government financial processes— from budgeting to cash management to accounting and audit,” Lacson said.
“UACS calls for transparency and accountability, or so they claim. As my team and I randomly analyzed this coding system, say, of the National Irrigation Administration, we discovered that there were some codes missing.
To our surprise, the ‘missing codes’ were utilized to insert some projects during the budget deliberation in the House of Representatives.
We likewise discovered that in the budget of the said agency alone there is a total lump sum amounting to P11.3 billion,” Lacson said.
“The issue on the (alleged) PDAF (in the budget) is just secondary,as the main issue here is the revival of (Budget Circular 541), which brought about the DAP that was declared unconstitutional by the SC.
The revival of the Budget Circular 541 could pave the way or reverse of the DAP,” Lacson said.
“It’s a work in progress now. We’re studying (the GAA) and I do not want to leave any provision that is constitutionally infirm, left behind or not included in the petition,” he said.
“We want to make sure that we have all the evidence once we file the petition for prohibition in questioning the constitutionality of certain provisions,” he added.
Both Senators Sergio Osmeña III and Francis “Chiz” Escudero affirmed the findings of Lacson but Escudero said the lump sums in the budget were temporary.
Nonetheless, both allies of President Aquino countered Budget Secretary Florencio Abad’s assertion that Lacson merely misinterpreted the discretionary items in the 2015 budget.
“I did not realize it immediately, the P400 (plus) billion. But I did take notice of the lump sum (appropriations) in various agencies which made me realize that these were pork,” Osmena said.
“That is a lump-sum appropriation. When we passed the 2015 budget, it was a lump sum. If it was temporary (lump sum), it means there could be some realignments (later on) and it would make it worse because that would be against the law,” he added.
Just temporary
Escudero said the lump sums are “just temporary” and appropriate safeguards were installed in the budget to prevent their abuse.
“The observations of Sen. Ping Lacson regarding the lump sums are correct. There are, indeed, lump sums. However, it is important to note that these funds cannot be used unless an itemized listing I submitted,” Escudero said.
Lacson retorted: “The lump sums are only ‘temporary’ because we inserted a provision that requires the submission of an itemized listing to the DBM (Department of Budget and Management) of how and or where it will be spent, copy furnished to COA (Commission on Audit) and Congress, before such items can be used. With all due respect to Sen. Chiz, there is no such animal called temporary lump sum.
“It’s either line budget item or lump sum. If it’s lump sum, it is discretionary and prone to misuse and corruption.”
Abad called the allegations of Lacson “inaccurate,” adding the senator should have asked budget officials about the items he questioned in order to prevent misinterpretation of the budget data.
While the General Appropriations Act (GAA) may appear complex, “it will very clearly show two things: that the supposed DAP provisions are not in the GAA, and that there are fewer lump sums in the administration’s spending plan this year. As a matter of fact, 87 percent of the Special Purpose Funds under the 2015 budget has already been disaggregated,” Abad said.
“We must not mislead the public by implying that lump sums in the budget are tantamount to fund irregularity. It’s true that most budget items ought to be disaggregated, exactly as we have done.” But he admitted that some budget items, “by their very nature, must be expressed in lump sums, so that the government can continue to deliver goods and services in the face of contingencies.”
Abad added: “We urge Mr. Lacson to reach out to the DBM if he has any misgivings about the national budget, so we can prevent the misinterpretation of budget data. As it stands, it is unclear to us how Mr. Lacson arrived at the lump-sum figures that he named in his PICPA speech, because these figures are not in the GAA,” he added.
